Swiss Franc ticks up, but US Dollar dips remain contained amid risk-off markets

USD/CHF nudges down from 0.8100 but maintains its near-term bullish trend intact.
Conflicting news from Iran is keeping risk appetite subdued.
Swiss trade surplus narrowed to CHF 5,224 million in June from CHF 5,989 million in May.

Guillermo Alcala FXStreet

The Swiss Franc (CHF) has trimmed some losses against the US Dollar (USD) on Tuesday, as USD/CHF bulls failed to find acceptance above the 0.8100 area. Market speculation about a ceasefire proposal in Iran has triggered a slight pullback on the US Dollar, yet dips have been shallow so far, as concerns of an all-out war are underpinning support for the safe-haven Greenback.

The US hit targets across Iran for the tenth consecutive day on Tuesday, and Tehran responded by striking US assets in Gulf countries. Reports of attacks on vessels attempting to cross the Strait of Hormuz and the announcement by the Tehran-backed Houthis of a blockade to Saudi Arabian vessels in the Red Sea are keeping Oil prices near six-week highs.

Ceasefire hopes are keeping the Swiss Franc from falling further

Meanwhile, Qatar and Pakistan keep working to reach another ceasefire. Iranian authorities affirmed on Monday that they received a proposal for another 10-day ceasefire. Axious news, on the other hand, reported that US President Donald Trump is preparing for an all-out war in case the negotiating way fails.

Earlier on Tuesday, data released by the Swiss Federal Customs Administration revealed that the Trade Balance surplus narrowed slightly in June, to CHF 5,224 million from the upwardly revised CHF 5,989 million in May.

In the US, the calendar is thin this week with only the Preliminary S&P Global Purchasing Managers' Index (PMI) release, due on Friday, worth mentioning. The US Dollar, however, maintains a moderately bullish near-term tone, buoyed by concerns that the situation in Iran escalates out of control, and market speculation that rising energy prices will force the Federal Reserve (Fed) to hike rates in September.

Economic Indicator

Trade Balance

The Trade Balance released by the Federal Customs Administration is a measure of balance amount between import and export. A positive value shows a trade surplus while a negative value shows a trade deficit. Any variation in the figures influences the domestic economy. Generally speaking, if a steady demand in exchange for Swiss exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the CHF.

GBP/USD drops to fresh weekly low below 1.3400

GBP/USD turns south in the second half of the day on Tuesday and trades at a fresh weekly-low below 1.3400 as the Middle East uncertainty causes investors to adopt a cautious stance. Earlier in the day, the data from the UK showed that the Unemployment Rate remained at 4.9% in the three months to May, compared with expectations of 5%, but failed to support the British Pound.

EUR/USD keeps range above 1.1400 after German ZEW

EUR/USD struggles to find direction and fluctuates in a narrow channel above 1.1400 on Tuesday, as the US Dollar (USD) stabilizes following Monday's rebound. The uncertainty around the US-Iran conflict limits the pair's upside but traders refrain from taking large positions ahead of the European Central Bank policy announcements on Thursday, which could drive the Euro's near-term valuation.

Gold clings to moderate gains above $4,050

Gold gains traction following Monday's choppy action and advances toward $4,100 on Tuesday. However, the uncertainty surrounding the conflict in the Middle East and growing expectations for a hawkish Federal Reserve policy outlook make it difficult for the precious metal to gather bullish momentum in the near term.

Bitcoin extends advance as ETF inflows, Iran war mediators' proposal lift risk mood

Bitcoin extends its gains, trading above $65,800 after closing above the key technical hurdle the previous day. The bullish price action is further supported by the return of institutional demand, with spot Exchange Traded Funds continuing their inflows on Monday. In addition, the renewed hopes for peace between the US and Iran have lifted risk sentiment, providing an additional tailwind for the Crypto King.

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