USD/CHF rebounds above 0.7900 despite increasing US-EU tensions
USD/CHF halts its three-day losing streak, trading around 0.7910 during the Asian hours on Wednesday. The pair gains ground as the US Dollar (USD) recovers its daily losses despite rising United States (US)–Greenland concerns.
However, the USD/CHF pair could weaken as the Greenback faces pressure from “Sell America” sentiment, while the safe-haven Swiss Franc (CHF) gains support from rising risk aversion. US President Donald Trump said there is “no going back” on his ambitions regarding Greenland, alongside earlier threats to impose new 10% tariffs on eight European Union (EU) countries, fueling concerns over slower economic growth.
Markets also fear that Europe could leverage roughly $10 trillion in US assets, with a Danish pension fund planning to exit Treasuries. European countries have pushed back, threatening new tariffs unless a Greenland deal is reached. The European Union signaled potential duties on $93 billion of US goods, while France reportedly urged the use of the bloc’s Anti-Coercion Instrument.
The US Dollar could have received support as the latest US labor market data have pushed back expectations for further Federal Reserve (Fed) rate cuts until June. Fed officials have signaled little urgency to ease policy further until there is clearer evidence that inflation is sustainably moving toward the 2% target.
Switzerland’s Producer and Import Prices declined 1.8% year-over-year (YoY) in December 2025, deepening from a 1.6% fall in November and marking the sharpest producer deflation since September. Monthly prices fell 0.2%, contrary to expectations for a 0.2% increase, but moderating from the prior 0.5% decline.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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