Swiss Franc Falls as Tariffs & Weak US Jobs Shake Markets

Swiss Franc Weakens as U.S. Jobs Data Fuels Fed Cut Bets

The Swiss franc declined on Monday following weaker-than-expected U.S. employment figures, which increased speculation that the Federal Reserve may move toward interest rate cuts. Revisions to previous nonfarm payroll numbers added further weight to the dovish outlook.

Swiss Industry Faces Threat from U.S. Tariffs

Switzerland's export-driven industries sounded the alarm last week after former President Trump imposed aggressive tariffs as part of his trade overhaul. Although pharmaceutical products received some exemptions, manufacturers warned that tens of thousands of jobs could be affected.

The 39% tariff represents a major hit to Switzerland’s international trade competitiveness. Swiss President Karin Keller-Sutter confirmed that dialogue with the U.S. would continue, though Switzerland has limited leverage to offer major concessions.

In 2024, the U.S. accounted for roughly 65 billion Swiss francs in Swiss exports—around one-sixth of total outbound trade. While goods exports generated a trade surplus of 38.7 billion francs, the services sector showed a 20.4 billion franc deficit.

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Stronger Franc Challenges Inflation Management

Inflation in Switzerland rose more than anticipated in June, offering a short-term relief for the Swiss National Bank, which had recently seen price levels dip below zero. A major contributor to soft inflation has been the Swiss franc’s strength, which hit record highs during the last quarter.

The currency has appreciated over 10% this year, largely driven by investor uncertainty surrounding Trump’s trade maneuvers. Over the weekend, U.S. officials suggested that a potential extension to the tariff ceasefire with China was being considered.

USD/CHF Technical Levels

The franc encountered firm resistance at 0.8026 against the U.S. dollar last week. With prices consolidating just above that zone, the short-term bias remains slightly tilted to the downside.