USD/CHF slumps to near 0.8550 amid Trump tariff uncertainty, US NFP data in focus

• USD/CHF tumbles to near 0.8550 in Friday's early European session, losing 0.55% on the day. 
• The economic uncertainty under fresh Trump's tariff policy boosts the safe haven flows, supporting the Swiss Franc.
• The Swiss CPI rose by 0.3% YoY in March, softer than expected. 
  

The USD/CHF pair attracts some sellers to around 0.8550 during the early European session on Friday, pressured by the weaker US Dollar (USD). The Swiss Franc (CHF) gathers strength against the Greenback amid an increased risk-off mood by investors. Investors will keep an eye on the US employment data from March, which is due later on Friday. 

The markets flock to safe-haven assets in response to US President Donald Trump's unexpectedly aggressive tariffs on major trading partners. Trump's reciprocal tariff plans call for a 10% tariff on all US imports except those that comply with the US-Mexico-Canada Agreement. The Trump administration imposed a 31% levy on Swiss imports.

Nonetheless, the concerns over the economic slowdown in the United States on the tariff news and related further fall in US stocks continue to undermine the USD. Risks to the US economy were also seen in rising bets on Federal Reserve (Fed) interest rate reduction, which might contribute to the USD's downside. 

Short-term interest-rate futures are now pricing in nearly 70% odds of a Fed rate cut in the June meeting, up from about 60% before the tariffs were announced, according to the CME FedWatch tool.  

On the Swiss front, the country's Consumer Price Index (CPI) rose by 0.3% YoY in March, compared to an increase of 0.3% prior, the Swiss Federal Statistical Office reported on Thursday. This figure came in slightly below market forecasts of 0.5%. On a monthly basis, the CPI was flat, in line with the consensus and following a spike in February of 0.6%. Meanwhile, the CHF has benefited from the massive uncertainty in the financial markets and the ongoing geopolitical tensions.