Currency Drama: Swiss Franc Gains Amid U.S. Political Tensions

The Swiss franc and euro advanced against the dollar as U.S. political tensions threaten the Federal Reserve's independence. The dollar index dropped, while gold hit a record high. Analysts remain cautious but expect the Fed to stay data-driven, with geopolitical events adding to market unease.

The Swiss franc and euro surged against the U.S. dollar after the Trump administration threatened Federal Reserve Chair Jerome Powell with a criminal indictment, sparking concerns over the central bank's independence. This move sent shockwaves through the currency market and raised questions about the dollar's role as a safe-haven currency.

The dollar index dropped 0.31% to 98.82, halting a five-day winning streak. Gold prices soared to an unprecedented $4,600.33 per ounce, signaling broader market anxiety. Commerzbank's Thu Lan Nguyen warned about long-term changes to the Fed's response function should the White House gain control over monetary policy.

Amid this political turmoil, the Swiss franc emerged as the top performer, gaining 0.42% against the dollar. Meanwhile, the euro also benefited from the situation, climbing 0.38%. Despite the market unrest, analysts believe the Fed will maintain its data-driven approach, although geopolitical tensions and policy uncertainties continue to complicate the economic outlook.