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USD slides as European yields rise and gold sparks FX gains

The Swiss franc fell after SNB-related comments attributed CHF weakness to other countries higher inflation expectations, sending USDCHF higher.

Reported · Written up by our desk · Major Pairs

European stocks finished mostly higher on Friday, but the session could not erase most of the week’s losses as investors continued to weigh elevated bond yields and oil prices, according to Forexlive. The broader STOXX 600 was still on pace for a weekly decline, with yield pressure particularly notable in France and Italy amid inflation concerns, heavy sovereign issuance, and shifting views toward a more hawkish ECB.

In foreign exchange, the dollar gave up some of its earlier declines, while the Australian dollar and New Zealand dollar were stronger. Forexlive also linked the AUD and NZD gains to moves in gold, which was surging.

Sterling was not cited in the source, but Forexlive said the Swiss franc moved lower after SNB official Tschudin said CHF weakness reflected other countries’ higher inflation expectations and that Swiss inflation remains low due to low inflation expectations.

That dynamic pushed USDCHF higher as U.S. assets also reflected a rebound, with U.S. stocks trading higher after sharp declines. Forexlive noted U.S. Treasury yields rose across the curve, with the 10-year back above 4.7% and the 30-year above 5.25%, with the 30-year near its week high since 2007, keeping pressure on longer-term borrowing costs.

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