USD/CHF hits fresh long-term lows near 0.7900 as market sentiment sours

The US Dollar hits fresh multi-year lows, with the Swiss Franc buoyed by safe-haven demand.
Renewed concerns about trade tariffs have crushed risk appetite on Tuesday.
Fed Chair Powell's speech and the US Job Openings are likely to drive the pair later today.

Guillermo Alcala FXStreet

The Swiss Franc is one of the strongest G8 performers, amid higher demand for safe havens as risk aversion increased during Tuesday’s European market session. The USD/CHF, as a result, has extended its decline to fresh 14-year lows at the 0.7900 area.

US President Trump’s comments highlighting the challenges to cut a trade deal with Japan and Treasury Secretary Bessent’s threats of higher tariffs from July 9 have crushed risk appetite on Tuesday.

In the US, the uncertainty about Trump’s sweeping Tax bill, which is expected to add another $3.3 trillion to an already high US debt load, is feeding concerns about and undermining the US Dollar’s safe-haven status.

The Swiss Franc rallies despite mixed macroeconomic figures

Macroeconomic data from Switzerland has been mixed. Retail sales remained flat in May, against expectations of a 0.8% increase, while April’s reading was downwardly revised. Adjusted for the effects of sales and holidays, however, retail consumption fell 0.8% in May.

These figures have been offset by a sharp improvement in manufacturing activity. The SVME PMI rose to 49.6 in June, after a 42.1 reading in the previous month and beating expectations of a 44.0 reading.

Later today, Fed Chairman Powell will speak at a central bankers' summit in Sintra, and the US JOLTS Job Openings will kick off a string of US labour indicators this week, ending with Thursday’s Nonfarm Payrolls Report. These figures will provide further clues on the next Fed decisions and set the US Dollar’s direction.

Economic Indicator

Real Retail Sales (YoY)

The Retail Sales data, released by the Swiss Federal Statistical Office on a monthly basis, measures the volume of goods sold by retailers in Switzerland. Changes in Retail Sales are widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the YoY reading comparing sales volumes in the reference month with the same month a year earlier. Generally, a high reading is seen as bullish for the Swiss Franc (CHF), while a low reading is seen as bearish.

Economic Indicator

SVME - Purchasing Managers' Index

The SVME Manufacturing Purchasing Managers Index (PMI) released by the Schweizerischer Verband für Materialwirtschaft und Einkauf and Credit Suisse captures business conditions in the manufacturing sector. The Manufacturing PMI is an important indicator of production growth in Switzerland. A result that values above 50 signals appreciates (or is bullish for) the CHF, whereas a result that values below 50 is seen as negative (or bearish).

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