|

Swiss Franc steadies as markets eye US tariff deadline, SNB reports major FX losses

  • The Swiss Franc stabilizes after a six-day losing streak, with markets turning cautious ahead of the August 1 US tariff deadline.
  • USD/CHF eases modestly from a five-week high of 0.8151, despite strong US data and a hawkish hold from the Federal Reserve.
  • SNB reports a loss of CHF 15.3 billion for the first half of 2025, primarily driven by a sharp decline in the US Dollar, wiping CHF 22.7 billion from the FX portfolio.

The Swiss Franc (CHF) steadies against the US Dollar (USD) on Thursday, snapping a six-day losing streak as investors rotate back into the Franc amid renewed safe-haven demand. The cautious tone in markets comes ahead of the looming US tariff deadline on Friday, August 1, with US President Donald Trump reiterating that new tariffs will be imposed on countries without finalized trade agreements. The shift in sentiment reflects heightened uncertainty surrounding global trade policy, prompting a pause in recent USD strength against the Swiss Franc.

The USD/CHF pair hit its highest level in over five weeks on Wednesday, climbing to 0.8151 after the Federal Reserve (Fed) left interest rates unchanged, as expected. However, the pair has since edged lower and is currently trading around 0.8123 during the American session, down nearly 0.30% on the day. The mild pullback comes despite stronger-than-expected US economic data, indicating a round of profit-taking and a shift in sentiment ahead of the tariff deadline.

The latest data from the US Bureau of Economic Analysis showed that inflation remains persistent, with the core Personal Consumption Expenditures (PCE) Price Index — the Fed’s preferred inflation gauge — rising 0.3% MoM in June, in line with expectations and faster than May’s 0.2% increase. On an annual basis, core PCE held steady at 2.8%, slightly above the 2.7% forecast. The headline PCE Price Index also climbed 0.3% MoM and 2.6% YoY, both beating expectations, pointing to sticky underlying price pressures.

In addition, labor market data offered further evidence of ongoing economic strength. Initial Jobless Claims came in at 218K for the week, better than the expected 224K, underscoring the persistent tightness in the US labor market.

Meanwhile, fresh data released by the Swiss Federal Statistical Office on Thursday further boosted demand for the safe-haven Franc. Real Retail Sales rose 3.8% YoY in June, sharply beating expectations of 0.2% and accelerating from May’s upwardly revised 0.3% (previously 0%). On a monthly basis, Retail Sales climbed 1.5% in June, rebounding from a revised 0.4% drop in May and marking the first positive reading in five months.

Separately, the Swiss National Bank (SNB) reported a CHF 15.3 billion loss for the first half of 2025, largely due to valuation losses on its foreign currency investments as the US Dollar slumped more than 10%, due to the impact of President Trump’s tariff policies. The decline wiped out CHF 22.7 billion in the SNB’s foreign currency holdings, highlighting the central bank’s sensitivity to global exchange rate movements. The report underscores the central bank’s exposure to global market movements and the ongoing volatility stemming from trade policy uncertainty.

Looking ahead, Friday’s US economic calendar will be closely watched, with July’s Nonfarm Payrolls (NFP), Average Hourly Earnings, and ISM Manufacturing Purchasing Managers Index (PMI) set to offer fresh insight into the health of the labor market and industrial activity. Any signs of cooling job growth or softer wage inflation could revive hopes of a Fed rate cut later this year, while stronger-than-expected data may reinforce the case for keeping rates higher for longer.

Author

Vishal Chaturvedi

I am a macro-focused research analyst with over four years of experience covering forex and commodities market. I enjoy breaking down complex economic trends and turning them into clear, actionable insights that help traders stay ahead of the curve.

More from Vishal Chaturvedi
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD trims intraday gains, stays flat around 1.1630

EUR/USD struggles to find direction and trades in a narrow channel on Monday. Investors refrain from taking large positions ahead of this week's critical Fed policy meeting, allowing the pair to stay in a consolidation phase following two consecutive weeks of bullish action. US Dollar gains ground as risk aversion kicks in. 

GBP/USD edges lower toward 1.3300 as markets turn cautious

GBP/USD corrects lower toward 1.3300 on Monday after posting gains in the previous week. The markets adopt a cautious stance ahead of the highly-anticipated Fed meeting, making it difficult for the pair to gather bullish momentum. 

Gold remains seases below $4,200 as markets gear up for Fed

Gold turned south after Wall Street's opening, trading south of $4,200. The US Dollar finds additional legs on a souring mood on Monday as market participants prepare for the upcoming Fed meeting, which will provide key insights into the short-term policy outlook.

RBA expected to hold interest rate amid rising inflation, steady economic growth

The Reserve Bank of Australia is on track to leave the Official Cash Rate unadjusted at 3.6%, following the conclusion of its December monetary policy meeting on Tuesday. The decision will be announced at 03:30 GMT, accompanied by the Monetary Policy Statement. RBA Governor Michele Bullock’s press conference will follow at 04:30 GMT.

The Silver disconnection is real

Silver just hit a new all-time high. Neither did gold, nor mining stocks. They all reversed on an intraday basis, but silver’s move to new highs makes it still bullish overall, while the almost complete reversals in gold and miners make the latter technically bearish.

Top 3 Price Predictions: Bitcoin and Ethereum aim for breakouts as Ripple holds at $2

Bitcoin, Ethereum, and Ripple record a minor recovery on Monday, starting the week on a positive note. The retail demand for major cryptocurrencies remains strong despite outflows from Bitcoin and Ethereum Exchange Traded Funds (ETFs).