The USD/CHF pair is currently positioned in negative territory around 0.7950 in the early European session on Wednesday. The US Dollar is experiencing a decline against the Swiss Franc due to ongoing geopolitical tensions and the dovish remarks made by officials from the US Federal Reserve. Market participants will monitor the upcoming US ISM Services Purchasing Managers Index report scheduled for release later on Wednesday. USD/CHF declines to approximately 0.7950 during the early European session on Wednesday. The turmoil in Venezuela has increased demand for safe-haven assets, thereby bolstering the Swiss Franc. Fed governor Miran indicated that ‘aggressive’ rate cuts are necessary.
The USD/CHF pair is currently positioned in negative territory around 0.7950 in the early European session on Wednesday. The US Dollar is experiencing a decline against the Swiss Franc due to ongoing geopolitical tensions and accommodating remarks from officials at the US Federal Reserve. Market participants will monitor the upcoming US ISM Services Purchasing Managers Index report scheduled for release later on Wednesday. A significant operation was carried out by the US military in Caracas, resulting in the capture of Venezuelan President Nicolás Maduro and his wife on Saturday. They were brought to the United States and made an appearance in a federal court in New York on Monday, entering a plea of not guilty to charges of narco-terrorism, weapons offenses, and corruption. After the operation, US President Donald Trump stated that the US is “in charge” and would “run” Venezuela during a transition period.
The report indicated on Wednesday that Russia has positioned a submarine and additional naval vessels to accompany an aging oil tanker near the coast of Venezuela. Market participants will pay close attention to the unfolding situation in Venezuela. Indicators of rising tensions between the US and Venezuela may enhance safe-haven flows, thereby favoring the CHF in comparison to the Greenback.
Additionally, accommodative indications from the US central bank could exert downward pressure on the USD. Fed governor Stephen Miran, whose term concludes at the end of January, emphasized on Tuesday that the Fed must implement significant interest rate cuts this year to ensure the economy continues to progress. In the meantime, Minneapolis Fed President Neel Kashkari indicated that he perceives a potential risk for the unemployment rate to “pop” higher.