- The Swiss Franco recovers in front of a weaker USD in risk adverse markets.
- “Selling America” returns with US tariffs again in the focus.
- Soft inflation figures in the US have increased hopes for fed cuts in September.
The US dollar is being beaten on all fronts, with the CHF of safe shelter recovering due to risk aversion. A mixture of skepticism about Trump’s ability to achieve some significant commercial agreement and soft inflation figures in the US, which have increased the hopes of a greater relaxation of the Fed, are crushing the US dollar.
The USD/CHF accelerated its reversal from the maximum of Tuesday about 0.8250 and is quoting 0.8% lower on Thursday, reaching minimums intradic in 0.8120 and approaching a minimum of several years in 0.1840.
“Sell America” trade returns
The commercial truce between the US and China announced failed to convince investors. The agreement, which still needs to be ratified by Chinese President Xi Jinping, basically restores the commercial terms already established in Geneva last month, with tariffs even at high levels and significant commercial restrictions. It is not the agreement that the market expected.
If that were not enough to sour the feeling of the market, Trump further removed the waters when announcing letters to all commercial partners specifying the demands to avoid higher tariffs from June 9.
Adverse risk feeling is weighing on the US dollar, already beaten by soft inflation figures in the USA on Wednesday, which have increased expectations of additional feats of Fed rates in September. Later today, the publication of the US CPI will be observed closely to confirm this vision.
FAQS tariffs
Although tariffs and taxes generate government income to finance public goods and services, they have several distinctions. Tariffs are paid in advance in the entrance port, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and companies, while tariffs are paid by importers.
There are two schools of thought among economists regarding the use of tariffs. While some argue that tariffs are necessary to protect national industries and address commercial imbalances, others see them as a harmful tool that could potentially increase long -term prices and bring to a harmful commercial war by promoting reciprocal tariffs.
During the election campaign for the presidential elections of November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy. In 2024, Mexico, China and Canada represented 42% of the total US imports in this period, Mexico stood out as the main exporter with 466.6 billion dollars, according to the US Census Office, therefore, Trump wants to focus on these three nations by imposing tariffs. It also plans to use the income generated through tariffs to reduce personal income taxes.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
