USD/CHF trades near 0.9070 during Tuesday’s Asian session, stabilizing after earlier volatility tied to US President Donald Trump’s inauguration. The US Dollar faced initial downward pressure as Trump appeared to strengthen ties with Chinese President Xi Jinping. Key factors, such as the TikTok deal and hints of a softer tariff approach, contributed to market uncertainty.

The US Dollar regained ground after reports that Trump will direct federal agencies to reassess trade policies with Canada, Mexico, and China, adding a bullish tilt to the USD. However, the Dollar Index (DXY) trimmed gains, hovering around 108.30, as US Treasury yields remained subdued at 4.23% for 2-year notes and 4.54% for 10-year bonds. Market sentiment reflects expectations that the Federal Reserve will keep rates within the 4.25%-4.50% range over the next three policy meetings. However, potential inflationary pressures under Trump’s administration could constrain the Fed to just one more rate cut.

The Swiss Franc (CHF) continues to face headwinds as markets anticipate further rate cuts by the Swiss National Bank (SNB), with Swiss rates already at a low of 0.5%. The easing of geopolitical tensions in the Middle East, particularly progress on a ceasefire agreement and hostage negotiations between Israel and Hamas, has reduced demand for the safe-haven CHF.

Trade Idea:
Buy USD/CHF on a break above 0.9100, targeting 0.9150, with a stop-loss at 0.9060. Monitor US trade policy updates and SNB statements for direction.