Swiss Franc Strengthens, Dollar Loses Ground
The USD/CHF pair weakened again on Monday (July 20th) after briefly rising near the 0.8100 level. The price then fell to around 0.8060 during the European session, down nearly 0.15% on the day.
Pressure on the USD/CHF came from a weakening US dollar. Global risk sentiment appeared to have improved slightly, particularly from positive movements in European markets, reducing demand for the dollar as a safe haven asset.
However, the US dollar's weakness remains potentially limited. Tensions between the United States and Iran have escalated again after the US launched its ninth night of attacks on Iran, while Iran retaliated with ballistic missiles and drones targeting US allies in the Middle East.
The risk of a broader regional conflict is keeping markets cautious. Furthermore, disruptions in the Strait of Hormuz have kept oil prices high, resurfacing inflation concerns.
Rising oil prices could reinforce expectations that the Fed may maintain its hawkish stance or even open the door to further interest rate hikes. This could act as a buffer against further US dollar weakness.
As a result, the USD/CHF remains under short-term pressure as long as the dollar weakens and risk sentiment improves. However, if the US-Iran conflict escalates or Fed officials sound hawkish, the US dollar could potentially gain support, and USD/CHF could attempt to rise again. (arl)
Source: Newsmaker.id
