USD/CHF falls as Swiss Franc gains on US-Switzerland trade optimism

• USD/CHF slips toward 0.8020 as the Swiss Franc outperforms amid growing trade optimism.
• Washington and Bern could finalize an agreement within two weeks, including a tariff reduction to 15%.
• The US Dollar remains steady as Congress advances the federal funding bill and markets await signals from the Fed.

USD/CHF declines on Tuesday to around 0.8020 at the time of writing, down 0.40% on the day, as the Swiss Franc (CHF) outperforms most of its peers. The Swiss currency benefits from rising optimism that the United States (US) and Switzerland will soon reach a trade agreement.

According to a Bloomberg report, the two countries could announce the signing of a deal within the next two weeks, under which the US would lower import tariffs on Swiss goods to 15%, from the current 39%. Such a reduction would improve the competitiveness of Swiss products in global markets.

Commerzbank noted that this deal would represent "the best of difficult scenarios," aligning trade conditions between Switzerland and the US with those applied to the European Union. However, the bank also warned that "nothing has been signed yet," advising cautious optimism.

Meanwhile, the US Dollar (USD) trades broadly stable. The US Senate has passed the government funding bill, which now moves to the Republican-controlled House of Representatives, where approval is expected by Wednesday, according to a Reuters report citing House Speaker Mike Johnson. The US Dollar Index (DXY), which measures the Greenback's performance against a basket of six major currencies, holds steady around 99.60.

Markets remain focused on the monetary policy outlook of the Federal Reserve (Fed). According to the CME FedWatch tool, the chance of another 25-basis-point rate cut at the December meeting stands near 62%, following two reductions this year totaling 50 basis points. These cuts aim to support a weakening labor market, while inflation remains above the central bank's 2% target.

Upcoming developments regarding US employment, particularly the ADP report due later in the day, and federal budget negotiations, will be closely monitored by investors to adjust positions on the US Dollar and safe-haven assets.