USD/CHF returns above 0.8200 with the Dollar appreciating as risk aversion eases

• The US Dollar is regaining lost ground as trade war fears ease.
• Swiss CPI contracted in May, which almost confirms an SNB cut in June.
• Later today, US Factory Orders and Job Opening figures might challenge the USD's recovery.

The US Dollar is posting moderate gains on Tuesday's European session, reaching intra-day highs past the 0.8200 psychological level, after bouncing up from at 0.8155, six-week lows. Easing concerns about trade wars are supporting the US Dollar's recovery, and weighing on the safe-haven Swiss Franc.

In Switzerland, May's Consumer Prices Index fell to deflation levels for the first time since 2021. The monthly CPI ticked up 0.1% after a flat reading, as expected, but yearly inflation contracted 0.1%, cementing hopes that the SNB will cut its benchmark rate to zero at its June meeting.

In the US, data from Monday confirmed that the tariff uncertainty is taking its toll on the manufacturing sector. The ISM Manufacturing PMI eased to 48.3 in May from 48.8 in April against market expectations of an increase to 49.5. The ISM report also highlighted longer delivery times, spurring concerns about potential shortages in some products.

The market will be attentive to April´s Factory Orders today for a more accurate assessment of Trump's "Liberation Day" in factory activity. New orders are expected to have fallen at a 3% rate in the month, following a 3.4% increase in the previous month. The risk is skewed to the downside for the USDollar.

Apart from that, US JOLTS Job Openings are expected to show that demand for employment remained fairly steady, with 7.1 million openings in April, after the 7.19 million seen in the previous month. These figures will frame Wednesday's ADP report and Friday's Nonfarm Payrolls release. The Dollar would need strong employment figures to ease concerns from factory data.