USD/CHF extended its advance for a second straight session on Monday, trading near 0.8100 during Asian hours. The move reflected broad US Dollar strength, with investors favoring the greenback amid renewed demand for safe-haven assets as tensions in the Middle East intensified.
Market sentiment deteriorated after US Central Command carried out additional strikes on Sunday in an effort to reduce Iran’s ability to target civilian vessels in the waterway. Reuters reported that US forces have struck more than 300 Iranian targets over three nights, including about 140 on Saturday. Conflicting statements from Washington and Tehran have also added to uncertainty over whether the strait remains open to shipping.
The escalation has supported oil prices and revived concerns that inflation could prove stickier than expected, a backdrop that may keep Federal Reserve policy tighter for longer. Traders will now focus on Tuesday’s US Consumer Price Index report for further guidance on the inflation outlook. Economists expect headline CPI to slip 0.1% month-on-month in June, while core CPI is forecast to rise 0.3%.
Despite some debate over the timing, markets still expect the Fed to deliver one more rate increase before the end of the year. Attention will also turn to Fed Chair Kevin Warsh, who is set to make his first formal appearance before the US Congress on Tuesday.
On the Swiss side, weaker domestic data has kept the franc under pressure. Switzerland’s consumer confidence index fell to -36 in June 2026 from -32 in June 2025, missing expectations for -35. With sentiment remaining deeply negative and inflation contained at 0.5% year-on-year in June, the Swiss National Bank faces little reason to tighten policy.
Instead, the SNB retains room to cut rates further or intervene in foreign exchange markets if needed to weaken the franc. That policy backdrop makes the CHF less appealing to investors seeking higher yields, reinforcing the currency’s vulnerability when global risk appetite deteriorates.The US Dollar Index held firm for a second straight session on Monday, trading near 101 in Asian hours as investors sought safety amid rising tensions in the Middle East. The move reflected a broader shift toward the dollar as markets assessed the risk of further disruption to maritime traffic and regional trade flows.
The latest boost to the greenback came after additional US strikes targeted Iranian assets over the weekend. Reports indicated that more than 300 targets were hit across three nights, including 140 on Saturday alone. Washington and Tehran also offered conflicting accounts of whether the strategic strait remained open to commercial shipping, adding to uncertainty in global markets.
The escalation has helped push oil prices higher, reinforcing concerns that inflationary pressures could reaccelerate. That has kept interest-rate expectations in focus, with traders still anticipating at least one more move by the Federal Reserve before year-end. A stronger oil market could complicate the central bank’s effort to bring inflation fully under control.
Investors are now turning to Tuesday’s US consumer price report for fresh signals on the Fed’s policy path. Headline inflation is expected to ease by 0.1% in June, while core inflation is forecast to rise by 0.3%. Any upside surprise could strengthen the case for tighter policy and provide further support to the dollar.
Attention will also be on the congressional appearance of Fed Chair Kevin Warsh on Tuesday, his first since taking office. His remarks may offer clues on how policymakers view the inflation outlook and the risks created by the latest geopolitical shock.
At the same time, the deterioration in US-Iran relations has sharply reduced expectations for near-term diplomacy. Tehran has signaled that talks are unlikely to advance unless Washington meets earlier commitments on shipping access and the normalization of Iranian oil exports. That hardening stance suggests the standoff may remain a key source of market volatility in the near term.
