- The Swiss Franc extends losses for the third straight day as the US Dollar regains momentum.
- Renewed global trade optimism boosts risk appetite, weighing on demand for safe-haven currencies, such as the Swiss Franc.
- US President Donald Trump signals trade progress, stating that “most deals are finished” and notes that 10–15% tariffs are being set via official letters.
The Swiss Franc (CHF) loses ground for a third consecutive day against the US Dollar (USD) on Friday, pressured by improving risk sentiment and a rebound in the US Dollar. Optimism over global trade developments is fueling the appetite for risk assets, undermining demand for traditional safe havens, such as the Swiss Franc. Meanwhile, the US Dollar finds fresh support from resilient US economic data and firm expectations that the Federal Reserve (Fed) will leave interest rates unchanged at its policy decision next Wednesday.
At the time of writing, the USD/CHF pair is hovering around 0.7963, recovering modestly after falling to a near three-week low earlier in the week. Despite the mid-week rebound, the pair remains confined within this week’s range and is still down nearly 0.80% for the week. The pair remains under pressure below the key 0.8000 psychological mark, well beneath the weekly high of 0.8226 set on Monday.
Trade optimism continues to support broader risk sentiment, helping the US Dollar recover lost ground. This week, the US finalized several bilateral agreements with Japan, Indonesia, and the Philippines, lifting hopes of a broader shift away from protectionist policies. On Friday, US President Donald Trump signaled that “most of the trade deals are finished,” noting that many are now formalized through letters specifying tariff rates ranging from 10% to 15%. Trump also said there is a “50-50 chance” of reaching a deal with the European Union, while EU diplomats hinted that a framework agreement could materialize as early as this weekend. He further added that the U.S. is “nearing” a trade deal with China, reinforcing optimism that a more stable global trade environment may be taking shape.
However, Trump maintained a firm tone on Canada, suggesting limited progress on trade talks with the northern neighbor. “I haven’t had a lot of luck with Canada,” he said on Friday, adding that he may impose a unilateral tariff rate without further negotiation. “There’s not a lot of negotiating, and I’m not focused on a deal with Canada,” he added, signaling that a trade agreement is unlikely in the near term.
On the data front, this week’s US releases have painted a mixed but broadly resilient macroeconomic picture, offering additional support to the US Dollar. Initial Jobless Claims came in below expectations, reinforcing the view that the labor market remains tight and continues to underpin household spending. Meanwhile, the S&P Global Manufacturing Purchasing Managers Index (PMI) dipped into contraction territory. In contrast, the Services PMI held firm above 52.0, helping to cushion overall business activity. In contrast, the Services PMI remained in expansionary territory, highlighting continued strength in consumer-driven segments of the economy. Durable goods orders in the US dropped 9.3% in June, reversing May’s big 16.5% gain. The decline was slightly better than the -10.8% forecast, mainly due to a sharp drop in aircraft orders.
Swiss economy FAQs
Switzerland is the ninth-largest economy measured by nominal Gross Domestic Product (GDP) in the European continent. Measured by GDP per capita – a broad measure of average living standards –, the country ranks among the highest in the world, meaning that it is one the richest countries globally. Switzerland tends to be in the top spots in global rankings about living standards, development indexes, competitiveness or innovation.
Switzerland is an open, free-market economy mainly based on the services sector. The Swiss economy has a strong export sector, and the neighboring European Union (EU) is its main trading partner. Switzerland is a leading exporter of watches and clocks, and hosts leading firms in the food, chemicals and pharmaceutical industries. The country is considered to be an international tax haven, with significantly low corporate and income tax rates compared with its European neighbors.
As a high-income country, the growth rate of the Swiss economy has diminished over the last decades. Still, its political and economic stability, its high education levels, top-tier firms in several industries and its tax-haven status have made it a preferred destination for foreign investment. This has generally benefited the Swiss Franc (CHF), which has historically kept relatively strong against its main currency peers. Generally, a good performance of the Swiss economy – based on high growth, low unemployment and stable prices – tends to appreciate CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
Switzerland isn’t a commodity exporter, so in general commodity prices aren’t a key driver of the Swiss Franc (CHF). However, there is a slight correlation with both Gold and Oil prices. With Gold, CHF’s status as a safe-haven and the fact that the currency used to be backed by the precious metal means that both assets tend to move in the same direction. With Oil, a paper released by the Swiss National Bank (SNB) suggests that the rise in Oil prices could negatively influence CHF valuation, as Switzerland is a net importer of fuel.
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