USD/CHF Rises Above 0.7950 Amid US Dollar Stability and Trade Deal Hopes

The USD/CHF pair gained modest ground on Friday, trading near 0.7965 during the early European session. The uptick is supported by mild strength in the US Dollar (USD), fueled by optimism around potential US-China trade agreements. However, broader caution in the market ahead of next week’s major events could cap further gains.

Trump Signals Shift to Negotiation with China

A report from the Wall Street Journal suggests that US President Donald Trump may be softening his approach to China, moving from pressure tactics to dealmaking. The aim is to secure an agreement that expands US business access in Chinese markets, especially in tech and commerce. This development has eased investor fears over prolonged trade tensions, reducing demand for safe-haven currencies like the Swiss Franc (CHF).

Fed Tensions Remain in Focus

Concerns over the independence of the Federal Reserve continue to linger. Trump’s recent unannounced visit to the Fed’s headquarters—reportedly to discuss renovation costs with Chair Jerome Powell—has added another layer of political pressure. Any further escalation between the White House and the Fed could weigh on the US Dollar in the near term.

Key US Data and FOMC Meeting Ahead

Investors now turn their attention to the upcoming US Durable Goods Orders data for June, set to be released later today. More importantly, next week’s FOMC policy meeting will be closely watched. While the Fed is widely expected to keep rates unchanged, market participants are pricing in a nearly 60% chance of a 25 bps rate cut in September, according to the CME FedWatch Tool.

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