USD/CHF strengthens above 0.8850 on bullish US Dollar, traders brace for FOMC Minutes

USD/CHF drifts higher to near 0.8875 in Tuesday’s early European session. 

Trump’s fresh tariff threats provide some support to the USD. 

Geopolitical risks might boost the Swiss Franc and cap the pair’s upside. 

The USD/CHF pair holds positive ground around 0.8875 during the early European session on Tuesday. The US Dollar (USD) gains traction broadly after US President-elect Donald Trump on Monday vowed tariffs on Mexico and Canada and extra tariffs on China. 

Trump said that he would sign an executive order imposing a 25% tariff on all products coming into the United States from Mexico and Canada and additional tariffs on China. This, in turn, lifts the Greenback against its rivals. 

Furthermore, economists expect just two rather than four rate reductions next year, and the Federal Reserve (Fed) will likely cut its key rate when it meets in the December meeting. Financial markets are now pricing in a nearly 55.9% possibility that the Fed will cut rates by a quarter point, down from around 69.5% a month ago, according to the CME FedWatch Tool. Traders await the Federal Open Market Committee (FOMC) Minutes for fresh impetus. The less dovish remarks from the Fed officials might further support the Greenback in the near term.