FX.co ★ Swiss Franc Falls as US Tariffs Overshadow Inflation Uptick

The Swiss franc has depreciated to approximately 0.81 against the US dollar, as fresh concerns arise over newly announced US tariffs, which are overshadowing a modest increase in Swiss inflation. On August 1, the Trump administration introduced a 39% tariff on Swiss exports, exceeding the previously announced rate of 31% in April, with the implementation scheduled for August 7. If these tariffs persist, they are likely to exacerbate disinflationary pressures within Switzerland. In the same timeframe, inflation experienced a slight rise to 0.2% year-on-year in July, surpassing the anticipated 0.1% but remaining close to zero. The combination of minimal price growth and increasing external threats suggests that the Swiss National Bank might consider further reducing interest rates deeper into negative levels. Further exacerbating the situation, Switzerland's manufacturing PMI fell to 48.8 in July from 49.6 in June, indicating a more pronounced contraction in the industry.