The USD/CHF pair extended its losing streak for a fourth consecutive session on Thursday, touching its lowest level in more than two weeks during early Asian trading. The pair is currently hovering near the 0.7900 mark, with sentiment firmly tilted in favor of further downside as persistent US Dollar (USD) weakness continues to weigh on the pair.
The US Dollar Index (DXY), which measures the greenback against a basket of major currencies, slid to a one-week low as dovish Federal Reserve (Fed) expectations and the ongoing US government shutdown eroded investor confidence.
Market participants have now fully priced in two additional Fed rate cuts—one in October and another in December—reflecting growing concern about the US economic outlook. Meanwhile, the Senate once again rejected a short-term funding proposal from House Republicans, marking the tenth failed attempt to end the government closure.
Adding to the bearish tone surrounding the USD, renewed tensions between the United States and China have heightened global economic uncertainty.
US President Donald Trump’s threat to raise tariffs on Chinese goods to 100%, coupled with Beijing’s move to tighten export restrictions on rare earth materials, reignited fears of an intensifying trade war. Both nations also imposed reciprocal port fees earlier this week, further escalating trade hostilities between the world’s two largest economies.
Beyond trade and policy risks, persistent geopolitical tensions have dampened risk appetite across global markets. The resulting flight to safety has strengthened demand for the Swiss Franc (CHF), a traditional safe-haven currency, further pressuring the USD/CHF pair.
The latest downturn follows last week’s rejection from the 0.8075 area—its highest level this month—suggesting that bearish sentiment may continue to dominate in the near term unless there’s a shift in US macroeconomic or political conditions.
