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22/05/26
16
Swiss Franc Steady as US-Iran Peace Deal Uncertainty Persists
The Swiss franc was little changed against the US dollar in Asian trading on Friday, with USD/CHF holding near 0.7870 as investors waited for confirmation of a potential peace agreement between the United States and Iran. Market participants remained cautious after reports indicated that both sides had reached a final draft with mediation from Pakistan, though no formal announcement had been made.
Sentiment briefly improved on Thursday after reports from Iran suggested that a deal could be unveiled within hours. Even so, key differences reportedly remain unresolved, particularly over Iran’s demand to retain its enriched uranium and secure recognition of its authority over the Strait of Hormuz. Those sticking points have limited the market’s willingness to fully price in a breakthrough.
The US dollar was steady overall, with the dollar index edging higher to about 99.27. Broader currency markets also drew support from stronger-than-expected US economic data. Preliminary S&P Global figures for May showed the composite PMI unchanged at 51.7, while the manufacturing index rose more sharply than expected to 55.3, signaling a faster pace of expansion in factory activity. That strength helped offset a more moderate increase in the services sector.
For the Swiss franc, attention is also turning to domestic monetary policy. Investors are watching for signs that the Swiss National Bank may reconsider its dovish stance if global inflation pressures continue to build, especially with oil prices still elevated. Any shift in the central bank’s tone could influence the franc’s near-term direction, particularly if geopolitical risks ease and demand for safe-haven assets fades.
For now, the pair remains range-bound, with traders waiting for clearer news on the US-Iran talks and fresh guidance on the Swiss policy outlook.
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