• USD/CHF trades around 0.7730 on Friday, down 0.21% on the day.
• The Swiss Franc benefits from renewed risk aversion linked to tensions in the Middle East.
• US trade uncertainty and focus on the PPI weigh on the US Dollar.

USD/CHF trades around 0.7730 on Friday at the time of writing, down 0.21% on the day, after posting modest gains in the previous session. The pair weakens as the Swiss Franc (CHF) attracts safe-haven flows amid renewed geopolitical tensions and persistent uncertainty surrounding global trade.

Tensions in the Middle East remain elevated after Iran stated that it would not allow enriched uranium to leave the country. The sizeable US military presence in the region keeps markets on edge, while President Donald Trump warns that military action remains possible if no agreement is reached. Although Iranian Foreign Minister Abbas Araqchi describes the talks as “the most substantive so far”, a source familiar with the US position indicates that Washington remains dissatisfied. Further technical meetings are scheduled in Vienna next week, but uncertainty continues to support defensive assets such as the Swiss Franc.

On the macroeconomic front, recent Swiss data present a mixed picture. Switzerland’s Gross Domestic Product (GDP) rose by 0.1% QoQ in the fourth quarter, following a revised contraction of 0.4% in the third quarter, but missed expectations of 0.2% rise. On an annual basis, GDP increased by 0.7%, slightly above the previous reading of 0.6%. Meanwhile, the KOF Swiss Leading Indicator for February came in at 104.2, above both expectations and the revised 103.3 print, signaling a moderate improvement in the economic outlook.

On the US side, the US Dollar (USD) struggles to extend its rebound, as the trade environment adds uncertainty. Donald Trump announced plans to impose global tariffs ranging from 10% to 15% on imports, following a Supreme Court ruling that struck down his previous reciprocal tariff regime. US Trade Representative Jamieson Greer indicated that several countries could face additional tariff increases in the coming days. These announcements maintain volatility and limit the appeal of the US Dollar.

Investor attention now turns to the release of the US Producer Price Index (PPI), due later in the day. The report could refine expectations regarding the Federal Reserve’s (Fed) policy trajectory and influence short-term price action in USD/CHF.