• USD/CHF rebounds to near 0.8850 following the USD’s recovery in a thin volume trading day.
• Investors expect the US Bessent to manage Trump’s agenda without denting geopolitical harmony.
• The SNB could push interest rates into a negative trajectory amid a low-inflation environment.

The USD/CHF pair rebounds to near 0.8850 in the European trading session on Thursday after a sharp sell-off on Wednesday. The recovery move in the Swiss Franc pair is bolstered by the US Dollar (USD), which rebounded in a thin volume trading session due to a holiday in the United States (US) economy on account of Thanksgiving Day.

The US Dollar Index (DXY), which gauges Greenback’s value against six major currencies, bounces to near 106.20, at the time of writing. The USD’s recovery came after a 1.9% correction from its two-year high of 108.00, noted on Friday.

The US Dollar drifted into a correction mode as investors watered down so-called “Trump trades” after US President-elect Donald Trump nominated Scott Bessent, a veteran hedge fund manager, for the role of Treasury Secretary. The USD fell sharply as investors anticipated Bessent to fulfill Trump’s economic agenda without jeopardizing fiscal discipline and political steadiness.

Bessent said in an interview with the Financial Times (FT) over the weekend that he will focus on enacting tariffs, however, objectives would be “layered in gradually”.

Going forward, market speculation for the Federal Reserve’s (Fed) monetary policy action in the December meeting will influence the US Dollar. According to the CME FedWatch tool, the probability for the Fed to cut interest rates by 25 basis points (bps) to 4.25%-4.50% next month is 70%.