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Dollar Struggles as Swiss Data Sours and U.S. Debt Risks Rise
Summary:
The US Dollar remains pressured near 14-year lows, capped below 0.8000 as revived US debt fears and cautious optimism over renewed trade talks weigh on sentiment.
Trading
0.79800
ENTRY
0.78000
TGT
0.80800
SL
0.79182 -0.00095 -0.12%
0
Point
Flat
0.78000
TGT
CLOSING
0.79800
ENTRY
0.80800
SL
The US Dollar (USD) remained trapped near multi-year lows on Monday, unable to build momentum above the psychologically significant 0.8000 mark against the Swiss Franc (CHF). As investor sentiment swung between cautious optimism over renewed trade negotiations and deepening concerns over the ballooning US fiscal deficit, the Greenback struggled to make a convincing recovery after last week's slump toward the 0.7960 area — levels not seen in nearly 14 years.
At the heart of the Dollar’s weakness is a growing narrative that markets can no longer ignore: while hopes for de-escalation in trade disputes have lifted risk appetite, the US fiscal story continues to deteriorate in the background, creating a dual drag on the currency.
Investor sentiment received a lift on Monday following reports that the United States and China reached a preliminary understanding on the strategic rare earths trade — a key sector in which China holds significant leverage. This tentative agreement helped alleviate fears of an escalating trade standoff, particularly as both sides signaled intent to keep communication channels open.
Adding to the cautiously upbeat tone, the US resumed trade negotiations with Canada after talks broke down late last week. Analysts see this as a constructive signal that major trading partners remain willing to hash out differences, even as political tensions simmer beneath the surface.
However, the modest optimism on trade has been tempered by deeper structural worries about the health of the US fiscal position. Treasury Secretary Scott Bessent floated the idea of extending the current July 9 budget deadline to September 1, giving Washington more room to reach consensus with its trading partners — but also highlighting the persistent gridlock in US policymaking.
Markets are also increasingly fixated on a sweeping tax bill currently advancing through the Senate, which is projected to add between $3 billion and $4 billion to the already bloated US national debt. With government borrowing at multi-decade highs and debt-servicing costs rising alongside interest rates, investors are beginning to question the sustainability of the US fiscal path. As a result, the Dollar’s upside potential appears capped — especially against traditionally safe-haven currencies like the Swiss Franc.
In contrast, Monday also brought soft economic news out of Switzerland, though its impact on the Franc remained limited. The KOF Swiss Economic Institute’s leading indicator — widely used to gauge the country's economic trajectory — fell to 96.1 in June, down from 98.6 in May and well below consensus expectations of 99.3. The decline reflects a broad-based deterioration in sentiment across multiple sectors, with the report noting a “particular downward tendency in the general business situation.”
Yet, despite the weaker data, the Swiss Franc held firm, reinforcing its traditional status as a defensive asset in times of global uncertainty. The muted reaction underscores the market’s broader risk-off tilt — where safe-haven demand can offset local economic weaknesses, particularly when global peers like the US are battling deeper structural challenges.
Technical Analysis 
From a technical standpoint, the USD/CHF pair continues to show signs of downside risk. After repeatedly failing to clear resistance near the 0.8000 level, price action has turned increasingly bearish. The pair is now trading well below the 50-day exponential moving average (EMA), signaling a dominant downtrend on the short-term chart.
More telling is the behavior of the Relative Strength Index (RSI), which recently emerged from overbought territory and has now printed a negative overlap — often an early warning sign of a bearish divergence in price momentum. This setup suggests the pair may be poised for further declines in the sessions ahead.
Immediate support lies near the recent low around 0.7960. A decisive break below this level could open the door for a deeper correction toward 0.7900, and potentially even 0.7825 — levels not seen since the early 2010s. On the upside, only a sustained break above 0.8000 would neutralize the current bearish tone and signal potential for a recovery.
TRADE RECOMMENDATION
SELL USDCHF
ENTRY PRICE: 0.7980
STOP LOSS: 0.8080
TAKE PROFIT: 0.7800
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