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Swiss franc holds gains vs US dollar as Red Sea tensions resurface

USD/CHF was around 0.8070, after a jump in the University of Michigan Consumer Sentiment Index to 54.4 in July.

Reported · Written up by our desk · Major Pairs

USD/CHF traded around 0.8070 on Friday, down 0.22% on the day, as safe-haven demand for the Swiss franc offset only modest support for the US dollar, according to FXStreet.

The dollar faced pressure after US consumer sentiment unexpectedly improved. The preliminary University of Michigan Consumer Sentiment Index rose to 54.4 in July from 49.5 in June, while the Current Conditions Index climbed to 54.9 from 47.7 and the Expectations Index improved to 54 from 50.7.

Inflation expectations were mixed, with the one-year outlook easing to 4.2% from 4.6%, while the five-year forecast held at 3.3%. FXStreet added that the greenback remained supported by the US Dollar Index near 100.80, but continued headwinds reflect this week’s softer-than-expected US CPI and an unexpected decline in PPI, contributing to markets ruling out a near-term Fed rate hike while remaining divided on September.

Geopolitical tensions supported the franc, the outlet said. Reuters reported Iran instructed Yemen’s Houthi rebels to prepare to close the Red Sea oil route if the US attacks Iranian infrastructure, alongside reports of explosions tied to the conflict and warnings of further retaliation, while the Swiss National Bank kept its policy rate unchanged at 0% in June and acknowledged rising near-term inflation risks.

Latest closeDollar index 100.71 ▲0.2%

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