- USD/CHF trades below 0.8100, stuck in a narrow range amid cautious sentiment.
- Risk-on mood driven by strong global equities dampens safe-haven demand for CHF.
- US imposes new import tariffs on 1kg and 100oz Swiss Gold bars, rattling bullion markets.
The Swiss Franc (CHF) remains subdued against the US Dollar (USD) on Friday, with USD/CHF hovering in a familiar range established this week, as traders weigh the latest US tariff decision targeting Swiss Gold exports and its potential fallout on Switzerland’s economy and trade relations.
At the time of writing, the pair is trading around 0.8080, struggling to break out decisively in either direction amid cautious market sentiment and diminished safe-haven demand, as risk-on mood prevails on the back of strong global equity markets.
The spotlight is firmly on Switzerland’s gold industry after the United States imposed an import tariff on 1-kilogram and 100-ounce cast Gold bars. These standard bullion bars are mainly refined in Switzerland. The move is expected to ramp up pressure on Switzerland, one of the world’s largest precious metal hubs, which accounts for approximately $61.5 billion in annual Gold exports to the United States. It marks another blow for Switzerland, which is already facing a 39% tariff on a wide range of exports under the Trump administration’s reciprocal trade measures.
As first reported by the FT, a ruling issued on July 31 by US Customs & Border Protection (CBP) now classifies one-kilogram and 100‑ounce Gold bars under the tariff code 7108.13.5500, bringing them under a higher import duty has caught the global bullion market off guard, with futures prices spiking to a record intraday high of $3,534 per ounce on Friday.
Switzerland’s gold industry has expressed deep concern over the surprise US tariff move, warning of significant disruptions to the global bullion supply chain. Christoph Wild, President of the Swiss Association of Manufacturers and Traders in Precious Metals (ASFCMP), emphasized that the decision risks undermining decades of stable trade flows between the two nations. He noted that the reclassification of standard Gold bars caught refiners off guard, especially as these bars were previously exempt from such duties.
Meanwhile, Swiss authorities remain engaged in active dialogue with US counterparts in an effort to de-escalate the growing trade tensions. The State Secretariat for Economic Affairs (SECO) has confirmed that technical-level discussions are ongoing. However, signs of diplomatic strain emerged earlier in the week, as Swiss President Karin Keller-Sutter left Washington on Thursday without securing any breakthrough to lower the tariffs.
Looking ahead, the downside for the Swiss Franc appears limited, as growing expectations of a Federal Reserve (Fed) rate cut in September may cap further gains in the US Dollar and help cushion CHF losses. Market focus now turns to next week’s key US economic data releases—including the Consumer Price Index (CPI), Producer Price Index (PPI), Retail Sales, and the preliminary reading of the Michigan Consumer Sentiment Index for August, which will offer crucial insights into inflation trends and consumer confidence.
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.
