U.S. Tariffs Spark Currency Shifts, Swiss National Bank Reports 15.3 Billion Franc Loss

The United States recently announced a new tariff order, which has had a notable impact on the Canadian dollar and the Swiss franc. The U.S. has imposed a 39% tariff on Swiss goods, leading to a slight increase of 0.2% in the USD/CHF exchange rate, reaching 0.8135. Meanwhile, the Thai baht continued its downward trend as the U.S. imposed a 19% tariff on Thai goods, resulting in a 0.2% increase in the USD/THB exchange rate to 32.760. The U.S. dollar against the South African rand remained relatively stable.

The new tariff order has also affected the Canadian dollar, which has remained steady despite the U.S. increasing tariffs on Canadian imports to 35%. This move has led to a short-term rise in the USD/CAD exchange rate. The uncertainty surrounding the new tariffs has increased demand for safe-haven currencies like the Swiss franc, potentially limiting the losses of the U.S. dollar. However, the reduced expectations of a U.S. interest rate cut may also help contain the dollar's losses.

The Swiss National Bank reported a significant loss of 15.3 billion Swiss francs in the first half of the year, primarily due to the depreciation of the U.S. dollar against the Swiss franc by over 10% in the second quarter. This depreciation resulted in foreign exchange-related losses amounting to 43.9 billion Swiss francs. The weakness of the U.S. dollar is largely attributed to market concerns over U.S. debt and the unpredictable tariff policies of the U.S. president.

The new tariff order has also complicated trade negotiations between the U.S. and Canada. The U.S. president has expressed that Canada's support for Palestine has made it difficult to reach a trade agreement. This stance has added complexity to the trade negotiations, as the U.S. seeks to pressure Canada to reduce its imports of Russian and Iranian oil. The energy security concerns and the politicization of trade have posed challenges to the global trade order.

In summary, the U.S. tariff order has had a mixed impact on various currencies. While the Canadian dollar has remained stable, the Swiss franc has experienced a decline. The new tariffs have increased uncertainty in the global trade landscape, affecting currency markets and trade negotiations. The U.S. dollar's performance has been influenced by market concerns over U.S. debt and the unpredictable nature of U.S. tariff policies. The Swiss National Bank's significant losses highlight the impact of currency fluctuations on financial institutions. The complexities in trade negotiations between the U.S. and Canada further underscore the challenges posed by the new tariff order.