USD/CHF weakens below 0.8850 on tariff uncertainty

• USD/CHF softens to near 0.8825 in Thursday's early European session.
• Investors worry that the trade war will dent US growth, weighing on the US Dollar. 
• The economic outlook is more uncertain, said SNB Quarterly Bulletin.

The USD/CHF pair trades on a softer note around 0.8825 during the early European session on Thursday. The concerns over a global trade war and the ongoing geopolitical tensions boost the safe-haven asset like the Swiss Franc (CHF). Investors await the final Gross Domestic Product (GDP) for the fourth quarter (Q4), weekly Initial Jobless Claims and Pending Home Sales, which will be released later on Thursday.

Uncertainty over the tariff outlook and the fears that US President Donald Trump's trade policies will slow the global economy and dent corporate profits undermine the Greenback against the CHF. Trump stated on Monday that automobile tariffs will be implemented shortly, but that not all of his threatening duties would be levied on April 2 and some nations may get exemptions. He also imposed 25% secondary tariffs on any nation that purchased oil or gas from Venezuela.

Investors will closely monitor the reciprocal tariffs due to be announced next week. Trump hinted that the measures may not be the like-for-like levies he has been pledging to impose. Any positive developments surrounding trade policies could lift the US dollar (USD) in the near term.  

The Swiss National Bank (SNB) warned in its quarterly bulletin released on Wednesday that the economic outlook for Switzerland and the rest of the world has become "considerably more uncertain" due to ongoing geopolitical risks around the world, as well as tariff threats by Trump.

The SNB acknowledged that the CHF depreciated against the Euro and the Greenback after the December interest rate cut. The Swiss central bank vowed to "use additional monetary policy measures to influence the exchange rate or the interest rate level," if necessary.