Swiss Franc Weakens as Soft Retail Sales Weigh on CHF

The Swiss Franc slipped in value as soft retail sales data weighed on its performance against the US Dollar. The CHF fell short of expectations, rising only 1.5% year-over-year in June, compared to a forecasted 3.1%. This missed estimate pushed USD/CHF higher, with the pair trading around 0.8070 during Asian hours on Friday.

BNY Mellon strategists pointed out that despite the franc's growing use as a funding currency, there is still room for its value to recover. They noted that the Swiss National Bank's policy outlook has been clear about keeping monetary policy unchanged 'for an extended period', which has met resistance from market expectations.

The USD/CHF pair also drew support from a firmer US Dollar, driven by a hawkish-leaning outlook for Federal Reserve policy and geopolitical developments in the Middle East. Meanwhile, safe-haven demand may ease as global risk sentiment improves due to diplomatic progress between the US and Iran, as well as a historic agreement involving Hamas and Israel.