EBC Markets Briefing | Swiss franc down despite cooling US job market
The Swiss franc lost ground on Monday after a dismal jobs report ramped up bets of imminent Fed rate cuts. The nonfarm payrolls count for the prior two months was revised down significantly.
Swiss manufacturers warned on Friday that tens of thousands of jobs were at risk after Trump hit them with one of the highest tariff rates in his global trade reset even with some relief for the drug sector.
A 39% tariff on the export-reliant country appears to be a heavy blow. President Karin Keller-Sutter said the government would keep talking to Washington, but there were only limited concessions it could offer.
Switzerland sent about 65 billion Swiss francs of goods to the US last year, or about one-sixth of its total exports, giving it a goods trade surplus of almost 38.7 billion francs. In services, it had a deficit of nearly 20.4 billion francs.
Swiss consumer prices unexpectedly rose in June, offering respite to the central bank after a dip below zero. The weakness in inflation is a stronger currency which hit a record high over the last quarter.
It has gained more than 10% so far as Trump's mercurial trade policies stir up fears in the markets. Washington is aiming for a possible extension of the tariff pause with Beijing, US official said on Sunday.
The franc saw strong resistance at 0.8026 per dollar last week. It is consolidating above the level, and the risk seems slightly skewed to the downside.
EBC Financial Group Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Global Financial Collaboration or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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