Swiss Franc weakens as risk aversion support US Dollar

USD/CHF continues its winning streak for the third successive day, trading around 0.8130 during the Asian hours on Wednesday. The pair appreciates as the US Dollar (USD) receives support from growing risk aversion tied to escalating geopolitical tensions between the United States and Iran.

US President Donald Trump downplayed the likelihood of immediate negotiations with Tehran following mutual military strikes and threats from Iran-backed Houthi militants to disrupt Red Sea shipping routes. On Tuesday, Trump pledged to respond if the group interfered with the waterway, though he did not outline specific action.

In response, Iran's top military command stated via the Xinhua news agency that Tehran will expand its strikes to target US and allied assets across the region if the US attacks Iranian nuclear facilities.

Switzerland's 10-year government bond yield hovering near two-month highs around 0.45%. This rise comes as escalating Middle East tensions drive up energy costs, pushing markets to reassess inflation, economic growth, and the future path of monetary policy. Despite these pressures, the Swiss National Bank (SNB) maintained its key policy rate at 0% during its latest meeting, projecting that inflation will remain largely stable over the medium term.