The foreign exchange market has recently seen a significant shift in its landscape. A combination of factors—waning risk aversion, weak US employment data, and easing expectations of a Fed rate hike—has continued to weigh on the US dollar. The USD/CHF exchange rate has fallen for two consecutive trading days. During Thursday's Asian trading session, the rate remained weak and volatile, trading around 0.8060, with a clear overall downward trend and the short-term correction deepening.

As geopolitical risks ease and safe-haven demand diminishes, the dollar's valuation is dragged down.

The core trigger for this round of dollar weakness was the signal of a temporary easing of geopolitical tensions in the Middle East, which directly weakened the dollar's safe-haven premium. Market reports indicated that Iran and Oman had reached a consensus on a shipping route through the Strait of Hormuz, suggesting that the efficiency of the Middle East energy transport corridor could improve, and the stability of regional energy supply could be enhanced. Currently, the joint statement between the two countries is in its final draft stage, and the proposed shipping route is planned to be piloted for two to four months. Iran has clearly stated that this cooperation does not represent the full resumption of navigation on this core global strategic waterway; regional geopolitical risks have not been completely eliminated, but the temporary easing is enough to reverse the market's safe-haven trading logic. As market panic subsided, funds flowed out of dollar-denominated safe-haven assets, directly putting downward pressure on the USD/CHF exchange rate.

Weak US jobs data continues to weaken the fundamental support for the US dollar.

Besides geopolitical sentiment, weaker-than-expected US labor market data further solidified the dollar's already weak position. The recently released US ADP private sector employment data significantly missed expectations, showing that only 44,000 new jobs were added in July, a sharp decline from the 98,000 added in June, and also below the market expectation of 70,000, highlighting a marginal weakening of the labor market. Scotiabank strategists stated that the US labor market remains tight overall, but there is currently no new upward pressure on inflation. This fundamental combination is exerting slight downward pressure on the dollar. The employment data failed to signal rising inflation, marginally weakening the dollar's upward support and continuing the overall downward trend of the dollar after the Fed's interest rate meeting. Currently, the market is highly focused on the US initial jobless claims data and the upcoming non-farm payroll report; these two core employment data will directly determine the short-term direction of the dollar.

The Federal Reserve's dovish stance has further cooled expectations of policy tightening.

Speeches by Federal Reserve officials further eased market expectations of tightening. San Francisco Fed President Daly delivered cautious policy remarks, receiving a sentiment score of 5.4 out of 10, below the historical average of 5.6, indicating a weakening of her overall hawkish stance. Daly stated that the inflation-boosting effect of previous tariff policies has gradually faded, but current investment in the technology sector continues to exert upward pressure on prices. She added that supply-side shocks such as the Middle East conflict have a temporary impact on inflation, and while long-term inflation expectations in the US remain generally stable, vigilance is still necessary. Therefore, she supports keeping interest rates unchanged in July, awaiting more economic data to confirm the trend. Influenced by these dovish comments, the Fed sentiment index fell 2.23 points to 138.69, indicating a cooling of market perception of tightening. The index remains above 100 in the hawkish range, suggesting that the market is not entirely bearish on the Fed's tightening policy.

Swiss inflation unexpectedly fell, and the Swiss National Bank maintained its accommodative stance.

Fundamental changes in Switzerland have further clarified the dynamics of the USD/CHF exchange rate. Swiss inflation fell slightly to 0.4% in July, a four-month low, down from 0.5% in June. This unexpectedly weak figure contradicts the Swiss National Bank's previous forecast of a slight upward trend in inflation. Despite the weaker inflation data, the overall stability of the Swiss banking sector has led the market to widely expect the Swiss National Bank to maintain current interest rates for the rest of the year. Further rate cuts are seen as an alternative policy tool, not a core policy strategy. This stability in the Swiss franc's fundamentals provides support for its strengthening. In summary , waning geopolitical risk aversion, weak US employment data, and cooling expectations of a Fed rate hike are all contributing to downward pressure on the US dollar. Coupled with the robust fundamentals of the Swiss franc, the short-term weakness of the USD/CHF exchange rate is unlikely to reverse. Future price movements will continue to be anchored to US employment data and the Fed's policy statements. USD/CHF daily chart source: FX678. At 13:40 Beijing time on August 6, USD/CHF was trading at 0.8072/74.