- The USD/CHF gains strength around 0.8090 in the early European session on Tuesday.
- Swiss products face an import tariff of 39% in the US from August 7, which weighs on the Swiss Franco.
- The weak Non -Agricultural Payroll (NFP) reports of the US fed speculation that the Fed will resume fees in September.
The USD/CHF pair quotes in positive territory around 0.8090 during the European session on Tuesday. The Swiss Franco (CHF) weakens against the dollar after the impact of US President Donald Trump, who imposed a surprising 39% tariff on Swiss exports. However, the increase in betting bets of the Federal Reserve (FED) in September could limit the rise in the torque. The data managers index (PMI) of the US ISMs for July will be at the Center for Care later on Tuesday.
Trump will impose a 39% tariff to imports from Switzerland, one of the highest worldwide, which threatens to leave the main exports of the country staggering. The Swiss government said Monday that the country is ready to make a “more attractive offer” in commercial negotiations with Washington. It is not clear if Switzerland and the US will reach a commercial agreement before the deadline. This, in turn, exerts some sales pressure on the Swiss Franco (CHF) and creates a tail wind for the torque.
The US non -agricultural payroll (NFP) report on Friday, weaker than expected, pointed to a cooling of the labor market and fed speculation that the Fed will resume its cycle of feat cuts in September. Financial markets are now valuing almost 84% probability that the FED reduces rates at 25 basic points (PB) at the September meeting, according to the Fedwatch tool of the CME.
The president of the Fed of San Francisco, Mary C. Daly, said Monday that, given the growing evidence that the US labor market is weakening and the lack of signs of persistent inflation driven by tariffs, the time of interest rate reductions is approaching. The negative labor data of the US and the moderate comments of the FED officials could weaken the dollar against the Swiss Franco (CHF) in the short term.
Tariffs – Frequently Questions
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.
