Trump’s unexpectedly harsh retaliatory tariffs triggered a wave of risk-off sentiment, fueling concerns about a potential global recession. As a result, the US dollar has weakened, with markets pricing in more aggressive rate cuts, anticipating a deeper economic impact on the US. The tariff announcement acted as the catalyst for the move, pushing the currency pair out of its month-long range and accelerating selling pressure.
In the current market environment, attempting to catch a falling knife is risky, especially with no clear bullish drivers in sight. A temporary rebound could occur if the Federal Reserve delivers hawkish comments or if US economic data significantly exceeds expectations. However, such a move would likely present another selling opportunity rather than a lasting recovery.
Latest Inflation Data from the Federal Statistics Office (3 April 2025):
Switzerland’s Consumer Price Index (CPI) for March increased by 0.3% year-over-year (y/y), falling short of the expected 0.5% rise.
The figure remains unchanged from the previous month’s increase of 0.3%.
Core CPI (Excluding Volatile Items):
Core inflation held steady at 0.9% y/y, the same as the prior reading.
This suggests underlying inflation pressures remain stable, despite external economic uncertainties.
Market Implications:
The lower-than-expected CPI could ease pressure on the Swiss National Bank (SNB) to further tighten monetary policy.
Investors will watch for any signals from the SNB on future rate decisions, particularly given global inflation trends.
A weaker inflation reading may also weigh on the Swiss franc (CHF), as markets assess potential rate cuts or dovish signals from policymakers.
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