USD/CHF remains depressed below 0.8000 amid a moderate market optimism

• The US Dollar remains capped below 0.8000 near 14-year lows.
• Hopes of trade deals and revived concerns about US debt are weighing on the USD.
• The KOF business barometer reflects a deteriorating economic outlook in Switzerland.

The US Dollar is unable to put any significant distance from last week's long-term low at  0.7960 area, as the pair remained capped below 0.8000 on Monday, with hopes of trade deals and reviving fears about the US fiscal health weighing on the Greenback's recovery.

News that the US and China have reached an agreement on the key rare earths issue and the resumption of the negotiations with Canada, which were broken on Friday, have boosted investors' sentiment on Monday.

Furthermore, US Treasury Secretary Scott Bessent suggested an extension of the July 9 deadline until September 1. This gives further margin to the US and its main trading partners to reach significant agreements and has contributed to lifting investors' spirits on Monday and keeping USD upside attempts limited.

Apart from that, the US sweeping tax bill, which is expected to add from $3 to $4 billion to an already swollen US Government debt, is making its way through the Senate. This bill has boosted concerns about a debt crisis in the US and is likely to be an added source of negative pressure for the USD.

In Switzerland, the KOF Leading Indicator deteriorated to 96.1 in June from 98.6 in May, against expectations of an improvement to 99.3. The study warns about a particular downward tendency on the general business situation and foresees a deteriorating economic outlook. The negative impact on the Swiss Franc, however, has been subdued.