Swiss Franc soars as Trump pushes off tariffs

The Swiss Franc has steadied on Friday after sliding 1.1% a day earlier.  In the European session, USD/CHF is trading at 0.9016, down 0.16% on the day.

The US dollar beat a hasty retreat against the major currencies on Thursday, after the White House announced that the US would not impose reciprocal tariffs before April 1.  There had been fears that Trump would impose the levies on Feb. 13 and the announcement brought relief to the financial markets and raised risk sentiment, sending the US dollar sharply lower.

Switzerland’s inflation rate falls to 0.4%

Switzerland’s inflation rate dipped to 0.4% y/y in January, down from 0.6% in December and in line with the market estimate.  This was the lowest annual inflation level since April 2021, as key sub-categories posted a decrease in prices, including food, clothing and services.  Monthly, CPI remained at -0.1% for a fourth consecutive month and matched expectations.  The Swiss National Bank is watching with concern as inflation continues to decline.  The Bank’s target band is between 0% and 2% and it could hike rates in March if inflation falls closer to 0%.

In the US, the Producer Price Index showed little change in January.  PPI rose 0.4% m/m after an upwardly revised 0.5% gain in December.  This was higher than the market estimate of 0.3%.  Annually, PPI rose 3.5%, unchanged from an upwardly revised 3.5% gain in December and above the market estimate of 3.2%.

The US wraps up the week with the January retail sales report.  The markets are bracing for a soft release, with a market estimate of -0.1%, after the 0.4% gain in December.  Annually, retail sales are expected to dip to 3.7%, after a 3.9% gain in December.

USD/CHF technical

• USD/CHF is testing support at 0.9026. Below, there is support at 0.9004.

• 0.9041 and 0.9063 are the next resistance lines.