The USD/CHF pair trades around 0.9050 on Thursday during European hours, retreating from its seven-month high of 0.9080. The US Dollar Index (DXY) stabilizes near 108.30, slightly below its multi-year high of 108.58 reached earlier this week.

The US Dollar faces limited downside as traders await the release of US Initial Jobless Claims and December’s S&P Global Manufacturing PMI. Expectations of a cautious Federal Reserve stance support the Greenback, with the Fed signaling only two rate cuts for 2025 during its December meeting, down from four previously projected.

The Swiss Franc (CHF), a safe-haven currency, benefits from escalating geopolitical tensions. Russia’s drone strike on Kyiv and intensified Israeli airstrikes in Gaza have heightened global uncertainty. Additionally, ongoing economic concerns in Switzerland weigh on the CHF, with the KOF Leading Economic Indicator declining to 99.5 in December from 102.9 in November, missing expectations of 101.1.

Market participants will closely monitor Switzerland’s SVME Purchasing Managers’ Index (PMI) for December, set to be released on Friday, for further insights into the Swiss economic outlook.

Trade Idea
If USD/CHF breaks below 0.9030, it could target support near 0.9000. A move above 0.9070 may signal renewed bullish momentum, with a potential test of 0.9100.