Trump’s Copper Tariffs Rattle Markets as $15 Billion in Imports Targeted

Economic

Commodity

Summary:

President Trump’s newly announced 50% tariffs on semi-processed copper goods will affect over $15 billion worth of imports, sparking concerns about inflationary pressures and U.S. supply chain disruption...

Scope and Impact of the Tariffs

The Biden-to-Trump transition’s intensified trade policy has now sharply turned toward copper. President Trump’s 50% tariffs on semi-finished copper products including wires, tubes, rods, and communication cables affect imports that totaled over $15 billion last year. This new trade measure signals a continuation of Trump’s strategy to revitalize domestic industry by penalizing foreign production, but it also raises costs for U.S. manufacturers and consumers.

Bloomberg’s analysis shows that about $7.7 billion worth of semi-processed copper mostly near-pure metal products and a similar amount of telecom-related cabling are included. These tariffs represent a major market intervention, similar in approach to Trump’s earlier moves on aluminum and steel, which were extended to derivative products to close regulatory loopholes.

Exemptions and Strategic Omissions

Refined copper, worth $8.4 billion in 2024 U.S. imports, is not subject to the new tariffs. This was a major surprise for investors, especially considering the administration’s stated goal of stimulating domestic copper output. However, the U.S. remains heavily dependent on refined copper imports, particularly for industrial and technological applications, which likely explains this calculated exclusion.

Market participants quickly interpreted this as a pragmatic compromise, avoiding direct pressure on essential sectors like electronics and EV production, which could suffer severely from input inflation. Instead, the focus is squarely on semi-finished goods, where Trump argues U.S. manufacturers can scale up quickly.

Economic and Market Reactions

The immediate market impact was severe. The announcement triggered a record decline in U.S. copper futures, reflecting both uncertainty in sourcing costs and concerns over global trade retaliation. Given that the U.S. imported 600,000 tons of semi-finished copper in 2024 35% from Canada, with the rest spread across Germany, South Korea, and Mexico the potential for diplomatic tensions is rising.

The tariffs are value-based, meaning higher copper-content items will face proportionally greater cost increases. For example, nearly pure copper rods will be more heavily affected than copper-containing electronics cables. This has sparked fears among telecom firms, auto manufacturers, and utility companies, which rely on diverse copper-based components.

Policy Outlook: Expansion Likely

The White House has signaled further action. Within 90 days, a plan is expected to extend the tariffs to additional copper-intensive manufactured products. This hints at a broader strategy of building a vertically integrated copper supply chain within U.S. borders. It echoes Trump’s earlier tactic of starting narrow and expanding, as seen with aluminum and steel tariffs.

However, without parallel support for domestic copper smelting and processing capacity, analysts warn that these tariffs could lead to rising input costs without meaningful job gains repeating past criticisms of protectionist trade shocks that ultimately hit downstream U.S. industries hardest.

A Costly Bet on Domestic Industry

Trump’s copper tariffs, while aiming to boost domestic semi-processed output, represent a high-stakes trade gamble. They target an essential industrial metal in a market still dependent on foreign supply, with ripple effects likely across construction, telecom, EVs, and renewables. The 50% rate is among the harshest tariff actions taken under this administration, and though refined copper was spared, uncertainty looms for both global suppliers and domestic users.

Market observers will now watch for further trade retaliation, supply chain adjustments, and upcoming details on how Trump’s 90-day tariff expansion mandate will unfold. For now, the copper trade just got a lot more expensive and a lot more political.

Source: Bloomberg

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Economic

Commodity

Market Overview and Price Movement

Oil prices reversed their recent downward trend as markets reacted to heightened geopolitical tensions. Brent crude rose to $67.93 per barrel and U.S. WTI climbed to $65.44 per barrel, each gaining 0.4% after Tuesday’s steep declines. The bounce followed four consecutive sessions of losses fueled by oversupply concerns related to OPEC+’s upcoming production increase in September.

Despite the rebound, uncertainty remains. Traders are now focused on whether India will scale back its Russian crude imports in response to the U.S. threats an action that could tighten global supply.

Trump’s Tariff Threats and Global Supply Risks

President Trump reiterated on Tuesday that he would impose higher tariffs on Indian goods within 24 hours if India continues purchasing oil from Russia. This threat introduces the possibility of disrupted crude trade flows, particularly if India redirects purchases or Moscow shifts supply to other buyers.

India, one of the largest importers of Russian oil since the start of the Ukraine war, responded strongly, calling the threat “unjustified” and reaffirming its stance to protect its economic interests. This has intensified trade tensions and cast uncertainty over future oil trade routes.

Trump also linked the energy price war to geopolitical strategy, stating that declining oil revenues could force Russian President Vladimir Putin to reconsider the Ukraine war. However, market reaction suggests skepticism about whether U.S. pressure will significantly alter India’s oil strategy or Russia’s energy diplomacy.

OPEC+ Output Expansion and Market Balancing

Meanwhile, OPEC+’s decision to boost production by 547,000 barrels per day in September adds a contrasting layer of pressure. The move is seen as a signal to recapture market share following years of production restraint. Although OPEC+ output hikes contribute to the oversupply narrative, some analysts believe geopolitical tensions could offset the impact of additional barrels, especially if Indian or Russian supply chains are disrupted.

From a fundamental standpoint, data from the American Petroleum Institute (API) provided modest bullish momentum. U.S. crude inventories reportedly fell by 4.2 million barrels last week well above analyst expectations of a 600,000-barrel draw. If confirmed by the Energy Information Administration (EIA), this would suggest stronger-than-expected demand or lower supply in the U.S., reinforcing upward pressure on prices.

Cautious Optimism Amid Volatility

Despite the current rebound, market sentiment remains fragile. Analysts such as Yuki Takashima of Nomura suggest that unless India actually curbs its Russian oil imports, WTI may continue to fluctuate within the $60–$70 per barrel range through August.

The interplay between U.S. trade threats, OPEC+ output policy, and U.S. inventory data will likely shape oil’s near-term path. Traders are also awaiting fresh direction from the upcoming EIA report and any escalation in U.S.-India trade tensions. Until clarity emerges, oil prices are likely to remain volatile and news-sensitive.

Source: Reuters

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IC Markets

Commodity

Forex

Economic

What happened in the U.S session?

U.S. stocks rebounded from oversold levels, but the macro backdrop remains tentative: jobs growth is soft, services and manufacturing are under pressure, and global trade uncertainty continues to weigh on sentiment. Safe-haven demand held for bonds and gold as prospects for Fed easing increased; the dollar was volatile amid shifting rate outlooks and policy uncertainty. The most-affected assets were technology stocks, exporter equities, Treasuries, the dollar, and industrial commodities like copper. Overall, the session reflected cautious optimism for risk assets but remains highly sensitive to economic data and new trade policy headlines, with defensive positioning prevalent across global markets.

What does it mean for the Asia sessions?

Asian traders should watch for volatility driven by regional data, U.S. tariff fallout, and powerful capital rotation flows. Earnings resilience and currency support remain tailwinds, even as headlines around trade, shipping, and macro releases heighten the potential for sharp, reactive moves throughout Wednesday’s session. Foreign funding rotation into Asian equities remains the dominant theme, aided by currency momentum and robust earnings, but sensitive to policy shifts and global trade headlines.Market focus stays on U.S. tariff escalations and their supply chain impacts, especially for India, South Korea, and China. Wednesday’s inflation prints (China), central bank updates (India), and wage/employment reports (Japan, NZ) are likely to drive near-term volatility, particularly for FX and equities. Watch for further declines in metals and freight rates if Chinese data stays weak, but oil may remain rangebound awaiting fresh supply/demand signals.

The Dollar Index (DXY)

On August 6, 2025, the dollar is showing mild weakness, pressured by increasingly soft domestic economic data, firm bets for Fed rate cuts, and defensive global risk sentiment. The dollar’s trend remains volatile and data-driven, with further swings possible as the macro and policy landscape develops through the week. The U.S. dollar continued to weaken against most major and emerging market currencies, following a sharp drop triggered by soft U.S. ISM PMI and factory order data earlier in the week. The DXY index fell from above 100 to below 99 late last week and has been unable to recover meaningfully, with volatility staying elevated due to shifting Fed expectations.Central Bank Notes:

● The Board of Governors of the Federal Reserve System voted unanimously to maintain the Federal Funds Rate in a target range of 4.25% to 4.50% at its meeting on July 29–30, 2025, keeping policy unchanged for the fifth consecutive meeting.

● The Committee reiterated its objective of achieving maximum employment and inflation at the rate of 2% over the longer run. While uncertainty around the economic outlook has diminished since earlier in the year, the Committee notes that challenges remain and continued vigilance is warranted.

● Policymakers remain highly attentive to risks on both sides of their dual mandate. The unemployment rate remains low, near 4.2%–4.5%, and labor market conditions are described as solid. However, inflation is still somewhat elevated, with the PCE price index at 2.6% and core inflation forecast at 3.1% for year-end 2025, up from earlier projections; tariff-related pressures are cited as a contributing factor.

● The Committee acknowledged that recent economic activity has expanded at a solid pace, with second-quarter annualized growth estimates near 2.4%. However, GDP growth for 2025 has been revised downward to 1.4% (from 1.7% projected in March), reflecting expectations of a slowdown in the coming quarters.

● In the revised Summary of Economic Projections, the unemployment rate is expected to average 4.5% in 2025, and headline PCE inflation is forecast at 3.0% for the year, with core PCE at 3.1%. Policymakers continue to anticipate that inflation will moderate gradually, with ongoing risks from tariffs and global conditions.

● The Committee reaffirmed its data-dependent and risk-aware approach to future policy decisions. Officials stated they are prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede progress toward the Fed’s goals.

● As previously outlined, the Committee continues the measured run-off of its securities holdings. The pace of balance sheet reduction, which slowed since April (monthly redemption cap on Treasury securities reduced from $25B to $5B, while holding agency MBS cap steady at $35B), was left unchanged this month to support orderly market functioning and financial conditions.

● The next meeting is scheduled for 16 to 17 September 2025.

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Gold continues to trade near all-time highs, underpinned by dovish Fed expectations, robust safe-haven demand, and ongoing political and trade uncertainty, even as minor U.S. dollar strength briefly caps further gains. The outlook remains bullish-to-neutral with volatility likely as global headline risk persists. Gold remains supported by a surge in expectations for a September interest rate cut from the Federal Reserve, triggered by last week’s weak jobs data and ongoing economic softness. Market participants currently price in about an 81% chance of a rate cut in September, with at least two cuts forecast before year-end.

Next 24 Hours Bias

Medium Bullish

The Australian Dollar (AUD)

The Australian Dollar starts August 6 on the defensive, trading at multi-month lows versus the U.S. dollar as the RBA is expected to cut rates, and labor data signal ongoing softening. Modest gains in household spending and services activity offer some support, but the overall trend remains weak amid global and local headwinds. Markets are positioned for further volatility tied to monetary policy, jobs data, and global macro developments.

Central Bank Notes:

● The RBA held its cash rate steady at 3.85% at the July meeting on 8 July 2025, following a 25bps reduction in May and in line with widespread market expectations after recent data showed inflation tracking within the target band.

● Inflation continues to ease from its peak, with higher interest rates helping to rebalance demand and supply across the Australian economy. Data for the June quarter signaled ongoing progress, though underlying pressures persist in certain sectors.

● Trimmed mean inflation for the June quarter likely remained near 2.9% and headline CPI around 2.4%, both within the RBA’s 2–3% target range. The Board noted further evidence of inflation convergence, but flagged that not all price categories are moving in tandem.

● Financial markets have shown increased volatility in the wake of global tariff and trade policy developments—especially as a result of recent U.S. and EU announcements. This has pushed asset prices higher but contributed to an uncertain outlook for domestic growth and employment.

● Private domestic demand showed a tentative recovery. Real household incomes improved and signs of easing household financial stress emerged, but some business sectors continued to face subdued demand, limiting their ability to pass on cost increases.

● Labour market conditions remained tight overall. Employment continued to expand, with low rates of underutilization. Business surveys suggest labour availability remains a constraint, though there are signs of a gradual easing compared to earlier in 2025.

● Underlying wage growth softened modestly, though unit labour cost growth remains elevated due to below-trend productivity gains. The Board remains attentive to developments in wage and productivity dynamics as cost pressures continue to evolve.

● Uncertainties persist for both domestic activity and inflation. Consumption growth has risen, but more slowly than anticipated three months ago, with global and domestic factors both contributing to the cautious outlook.

● There remains a risk that household spending picks up more slowly than forecast, which could result in ongoing subdued aggregate demand and a sharper deterioration in employment conditions.

● Given that inflation is expected to remain around the target band, the Board judged that it was appropriate to keep policy settings unchanged in July, maintaining a position that is still mildly restrictive.

● The Board continues to monitor all incoming data and assesses risks carefully, with a focus on global trends, domestic demand indicators, inflation outcomes, and the labour market outlook.

● The RBA remains committed to its mandate of price stability and full employment and stands ready to adjust policy as needed to achieve these objectives.

● The next meeting is on 11 to 12 August 2025.

Next 24 Hours Bias

Weak Bearish

The Kiwi Dollar (NZD)

The NZD is moderately bearish as of Wednesday, pressured by rising expectations of an RBNZ rate cut, global trade headwinds (especially new U.S. tariffs), and subdued domestic economic momentum. Markets are defensive awaiting the Q2 jobs report and central bank policy updates, with risks skewed to further downside if local or external data disappoints. The New Zealand Dollar remains weak, trading at $0.589 against the U.S. dollar, near two-month lows and down roughly 1.8% over the past month. The currency has been in a mild downtrend ahead of crucial Q2 labor data, with the market anticipating a higher jobless rate and slower wage growth.

Central Bank Notes:

● The Monetary Policy Committee (MPC) agreed to hold the Official Cash Rate (OCR) at 3.25% on 9 July, marking the first pause following six consecutive rate cuts.

● The MPC cited heightened uncertainty and near-term inflation risks as reasons to wait until August for further action.

● Although the annual consumer price index inflation increased to 2.5% in the first quarter of 2025, it remained within the MPC’s target range of 1 to 3%, noting that the outlook for medium-term inflation pressures has evolved broadly in line with the May MPS projections.

● While it is expected to be near the upper end of the band in the second and third quarters of this year, easing core inflation and spare capacity in the economy should help return it toward the 2% midpoint over time.

● The MPC noted that, despite global factors, domestic financial conditions are evolving broadly as expected, as mortgage and deposit interest rates have continued to decline, reflecting a lower OCR, strong bank liquidity, and soft credit growth.

● In aggregate, GDP growth over the December and March quarters was stronger than expected, reflecting a pickup in household consumption and business investment. However, higher-frequency indicators suggest weaker-than-expected growth in April and May.

● Large economic policy shifts overseas and concerns about sovereign risk could result in additional financial market volatility and increased bond yields, while prolonged economic uncertainty might induce further precautionary behaviour by households and firms, slowing the domestic economic recovery.

● Subject to medium-term inflation pressures continuing to ease in line with the Committee’s central projections, the Committee expects to lower the OCR further, broadly consistent with the projection outlined in May.

● The next meeting is on 20 August 2025.

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

The Japanese yen is holding its recent gains and remains in demand as a global safe-haven, supported by cautious BOJ policy commentary, elevated global trade risks, and persistent volatility in risk assets. Daily direction for the yen is firm to bullish on Wednesday, 6 August 2025. Over the last week, the yen appreciated notably, benefiting from a global unwind of yen carry trades and rising investor risk aversion. The currency remains up over 2% from last Friday’s lows after safe-haven flows boosted demand for the yen.

Central Bank Notes:

● The Policy Board of the Bank of Japan decided on 31 July, by a unanimous vote, to set the following guidelines for money market operations for the inter-meeting period:

● The Bank will encourage the uncollateralized overnight call rate to remain at around 0.5%.

● The BOJ will maintain its gradual reduction of monthly outright purchases of Japanese Government Bonds (JGBs). The scheduled amount of long-term government bond purchases will, in principle, continue to decrease by about ¥400 billion each quarter from January to March 2026, and by about ¥200 billion each quarter from April to June 2026 onward, targeting a purchase level near ¥2 trillion in January to March 2027.

● Japan’s economy is experiencing a moderate recovery overall, though some sectors remain sluggish. Overseas economies are generally growing moderately, but recent trade policies in major economies have introduced pockets of weakness. Exports and industrial production in Japan are essentially flat, with any uptick largely driven by front-loaded demand ahead of U.S. tariff increases.

● On the price front, the year-on-year rate of change in consumer prices (excluding fresh food) remains in the mid-3% range. This reflects continued wage pass-through, previous import cost surges, and further increases in food prices, particularly rice. Expectations for future inflation have begun to rise moderately.

● The effects of the earlier import price and food cost increases are expected to fade during the outlook period. There may be a temporary stagnation in core inflation as overall growth momentum softens.

● Looking forward, the economy is likely to see a slower growth pace in the near term as overseas economies feel the pinch of ongoing global trade policies, putting downward pressure on Japanese corporate profits. Accommodative financial conditions are expected to buffer these headwinds somewhat. In the medium term, as global growth recovers, Japan’s growth rate is also expected to improve.

● With renewed economic expansion, intensifying labor shortages, and a steady rise in medium- to long-term expected inflation rates, core inflation is projected to gradually pick up. By the latter half of the BOJ’s projection period, inflation is forecast to move in line with the 2% price stability target.

● There are multiple risks to the outlook, with especially elevated uncertainty regarding the future path of global trade policies and overseas price trends. The BOJ will continue to closely monitor their impact on financial and foreign exchange markets, as well as on Japan’s economy and inflation.

● The next meeting is scheduled for 17 to 18 September 2025.

Next 24 Hours BiasStrong Bullish

Oil

Oil prices are under clear pressure on August 6, 2025, as the market digests a major OPEC+ output hike and renewed geopolitical tensions from U.S. sanctions threats and ongoing Russian supply risks. The near-term outlook remains weak to bearish, barring a meaningful supply disruption or positive surprise in macroeconomic data.OPEC+ agreed to increase production by 547,000 barrels per day for September, completing the reversal of previous supply cuts. The significant rise in OPEC+ supply is a primary factor weighing on prices as traders now fear a burgeoning glut, especially amid signs of softer global demand.Next 24 Hours Bias

Weak Bearish

Source: IC Markets

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Economic

Asian Markets Track U.S. Losses Amid Tariff Fallout

Asian stock markets weakened on Wednesday following a lackluster session on Wall Street, where concerns over President Donald Trump’s expanding tariff regime and weak U.S. economic data stoked fears of stagflationary pressures. MSCI’s broad index of Asia-Pacific shares outside Japan slipped 0.2%, while Japan’s Nikkei managed a modest 0.2% gain. Chinese blue chips and Hong Kong’s Hang Seng index were flat, reflecting investor caution in the face of uncertain trade policies and a softening global economy.

The Nasdaq and S&P 500 futures also remained under pressure, dropping 0.3% and 0.1% respectively, suggesting risk-off sentiment may persist into the U.S. session.

U.S. Services Data Signals Economic Strain

Fresh data showed U.S. services sector activity stagnated in July, with employment weakening and input costs surging at their fastest pace in nearly three years. This raised concerns that the effects of Trump’s tariff policies are starting to erode U.S. economic resilience.

Companies exposed to global trade reported notable pressure. Yum Brands, the parent company of Taco Bell, missed earnings expectations due to weakened consumer demand, while Caterpillar warned that tariffs could add up to $1.5 billion in costs this year. These developments signaled profit margin compression and weakening forward guidance, contributing to Wall Street’s declines.

Analysts, including Kyle Rodda of Capital.com, suggested this data pattern may reflect the early stages of a stagflationary scenario characterized by stagnant growth, rising unemployment, and inflationary pressures.

Trump’s Trade Agenda Expands

President Trump revealed plans for new tariffs on semiconductors and pharmaceutical imports, starting with a small rate and escalating over the next two years. He also hinted at a meeting with Chinese President Xi Jinping by year-end, contingent on progress toward a trade agreement. However, threats to raise tariffs on Indian goods over continued purchases of Russian oil added to geopolitical uncertainty.

These developments signal a widening scope of the administration’s protectionist strategy, with implications across tech, healthcare, and emerging market trade dynamics.

Dollar Rangebound Amid Yield Volatility

The U.S. dollar index stabilized at 98.821, recovering slightly from a sharp drop last Friday driven by soft labor market data. Investors now price in a 94% probability of a Fed rate cut in September, with expectations for at least two cuts this year, as indicated by CME FedWatch.

Two-year Treasury yields rose to 3.728%, up modestly overnight, while 10-year yields edged higher to 4.219% after a weak $58 billion 3-year note auction. Additional Treasury supply this week $42 billion in 10-year notes on Wednesday and $25 billion in 30-year bonds on Thursday will test demand at current levels amid expectations of looser monetary policy.

Trump also confirmed that Scott Bessent will not replace Jerome Powell as Fed chair when his term ends in May 2026, though his pick for the Board of Governors remains pending.

Commodities and Inflation Watch

Oil prices saw a modest rebound following four consecutive sessions of losses. U.S. crude rose to $65.30, while Brent hovered at a one-month low of $67.78. Despite this slight uptick, energy markets remain under pressure from global demand concerns and policy uncertainty. Trump stated he would decide on potential sanctions for countries buying Russian oil after a Wednesday meeting with Russian officials.

Gold remained steady at $3,381 per ounce, reflecting investor hesitation amid mixed inflation signals and central bank policy ambiguity.

Investors are bracing for a volatile second half of 2025 as tariffs, weak earnings, and soft economic data weigh on sentiment. With global supply chains under renewed stress and inflationary inputs rising, central banks may face limited room to maneuver, especially if growth slows while prices remain elevated.

Markets will likely remain sensitive to trade developments, Fed policy cues, and economic releases, with equities struggling for direction amid growing fears of a policy-induced downturn.

Source: Reuters

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Economic

Tariff Cut Uncertainty Clouds Auto Sector

On August 6, 2025, South Korea's Industry Minister Kim Jung-kwan emphasized that further dialogue is needed with Washington to finalize the timing of the U.S. tariff cut on Korean automobile exports. Although President Trump recently announced a 15% across-the-board tariff on most imports from South Korea down from the previous 25% auto tariff the implementation date for the reduced auto rate remains undefined.

This lack of clarity is especially concerning for major Korean carmakers like Hyundai and Kia, which are eager to secure tariff parity with Japanese and European competitors, who are already slated to benefit from the reduced rate under their respective trade deals with the U.S.

Trade Framework Broader but Still Incomplete

The tariff deal between the U.S. and South Korea is part of a broader effort to stabilize trade relations with a key Asian ally amid escalating global tariff realignments. However, Minister Kim acknowledged several unresolved areas, notably:

Digital trade and platform legislation, which were excluded from the current deal but remain a top concern for U.S. policymakers and tech firms.

Agricultural market access, which Seoul declined to liberalize, particularly for beef, rice, and fruits.

Quarantine standards for produce, which Washington cited as a non-tariff barrier, prompting Seoul to consider introducing a more transparent, scientific inspection process.

Kim’s statements reflect the ongoing complexity of aligning bilateral priorities, particularly as U.S. negotiators apply pressure across multiple sectors from autos and tech to food and health standards.

Parallel Negotiations with Japan Underscore Regional Pressures

Simultaneously, Japan’s chief negotiator Ryosei Akazawa is also en route to Washington to press the U.S. for faster execution of a similar auto tariff reduction. This illustrates the competitive urgency among Asian export economies to secure favorable terms ahead of the implementation of the 15% flat rate, which becomes effective Thursday.

The delay in formalizing the automotive tariff cut raises strategic concerns for Korea’s export-reliant economy, especially as it seeks to protect market share in the U.S. auto sector. The introduction of the 15% general tariff though a reduction from prior punitive levels still represents a significant cost increase for Korean exporters, many of whom operate on thin global margins.

In the longer term, Seoul’s push for clearer digital trade rules, faster quarantine inspections, and sector-specific carve-outs suggests that this deal is far from comprehensive. South Korea appears to be managing short-term trade stability while laying the groundwork for future revisions and expansions, particularly in digital services and non-tariff barriers.

While the new U.S.-South Korea trade framework helps defuse immediate tensions, critical ambiguities particularly regarding the auto sector remain unresolved. As South Korea continues its dialogue with Washington, it must balance competitive pressures from Japan and the EU, domestic industry interests, and diplomatic alignment with U.S. strategic objectives in Asia.

Source: Reuters

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MarketPulse by OANDA Group

Economic

Forex

The Swiss Franc has been on a formidable run in 2025, continuing a trend that began when it reached parity with the US Dollar in November 2022.With the American Exceptionalism theme, widening deficits, and growing trade distrust, markets have sought the CHF as a stable hedge against the Greenback.

Switzerland’s neutrality in economic and geopolitical affairs—and its low, stable inflation—make it an attractive safe haven, especially in a world facing fresh conflicts.The Franc’s rally to 2011 highs has also been fueled by regional currency trends. Since early 2025, the Euro’s strength has lifted its neighbors, adding tailwinds to the CHF.

This trend is actually one to watch in Forex where currencies tend to move in tandem with their neighbours – It’s an historic trend but got exacerbated with the ongoing geopolitics.Still, the Swissie hit a local top in July against most majors, including the Yen against which it attained weekly record highs.While the CHF’s appreciation has not been as explosive as the Euro’s, the trend had remained consistent and persistent – but is it now over?Next, we’ll look at USDCHF technicals to see if momentum can hold—or if a reversal is on the horizon.

Which safe-haven currency to choose – A small parenthesis on CHF/JPY

CHF/JPY Daily Chart, August 5, 2025 – Source: TradingView

CHF/JPY has been up-trending since May 2020 (which coincides with lows on Global Yields post-COVID peak fears), and this same trend found some steep acceleration, particularly since Liberation Day.The pair went from 109.00 lows to the current 186.00 highs.One aspect to consider when looking at this pair is the Safe-Haven nature of both currencies—the current overperformance of the Franc has marked it as the preferred option for flight-to-safety exposure.We are now seeing this trend conclude.The rest is to see if the recent highs mark an intermediate top or more one for the longer-run.

USD/CHF Technical Analysis

USD/CHF Daily Chart

USD/CHF Daily Chart, August 5, 2025 – Source: TradingView

The major pair, which had been in a steep downtrend since the beginning of 2025, has marked a double-bottom on its Daily charts during the month of July after attaining levels unseen since 2011.Since, the rebound has been consequent but with buyers failing to breach above the 0.8150 to 0.82 Main Resistance, the action is seeing more balance.Watch the 50-Day MA acting as immediate support to spot if buyers manage to respond to the 2025 Main Descending Trendline, which just acted as a supply zone for USD/CHF Sellers.The RSI Momentum was rising but is still closer to the neutral level than decisively bullish momentum.

USDCHF 4H Chart

USD/CHF 4H Chart, August 5, 2025 – Source: TradingView

Looking closer, sellers are bringing back the pair into its 0.80 Main Pivot Zone (0.80 to 0.8070), where reactions will be important to monitor.There are some conflicting signs between the uptrending intermediate trendline formed after the double bottom and the main descending 2025 trend.Looking at the conflicting price action, there is a high probability of a range forming around the Pivot Zone but it is still far from being confirmed, therefore the pair will have to be watched closely and may move fast depending on risk appetite.The current price action is currently seller-dominated after this morning’s miss in the US Services PMIs.

Levels to watch for the pair:

Daily Resistance Levels

● Main resistance 0.8150 to 0.82 (last highs 0.8165)

● 0.83350 bear Pivot

● May 2025 highs 0.8475 Resistance Zone

Daily Support Levels

● Long-term pivot 0.80 Zone (0.80 to 0.8070) Confluence with Daily and 4H MA 50

● 0.7950 bull Pivot

● 0.7875 2025 lows

Source: OANDA

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FastBull Featured

Daily News

[Quick Facts]

1. New Zealand's slight rise in unemployment strengthens rate cut expectations.

2. Japan's real wages fall for sixth straight month in June, raising recovery concerns.

3. Zelenskyy supports U.S. ceasefire initiative, calls for sanctions on Russia.

4. Trump says tariffs on pharma, chips to be announced in 'next week or so'.

5. Russia reportedly considers an air ceasefire, but is unlikely to agree to a full truce.

6. U.S. ISM data fuels stagflation concerns.

[News Details]

New Zealand's slight rise in unemployment strengthens rate cut expectations

New Zealand’s unemployment rate edged up from 5.1% to 5.2% in the second quarter, while employment fell by 0.1% on a seasonally adjusted basis, signaling continued weakness in the labor market and further reinforcing expectations that the central bank will cut interest rates by 25 basis points in August. The labor force participation rate dropped to 70.5%, its lowest level since the first quarter of 2021. Following the data release, the New Zealand dollar held steady near 0.5904 against the U.S. dollar, with markets pricing in an 88% chance of a rate cut on August 20.

ASB Bank economist Mark Smith noted that New Zealand's economic growth slowed and inflation returned to the target range, suggesting that further monetary easing could support the labor market. Meanwhile, ANZ Bank analyst Miles Workman argued that excess economic capacity may continue to suppress inflation, increasing the likelihood that the central bank will shift its focus to deflationary risks.

Japan's real wages fall for sixth straight month in June, raising recovery concerns

Driven by persistent inflation outpacing wage growth, Japan's real wages, adjusted for inflation, fell 1.3% year-on-year in June, marking the sixth consecutive monthly decline. May's figure was revised down to a 2.6% drop. Although June's decline was the smallest since January, it highlights broader pressures on consumer spending.

Additionally, the consumer inflation rate used by Japan's Ministry of Finance to calculate real wages rose 3.8% year-on-year in June, the smallest increase in seven months. A Ministry of Health, Labour and Welfare official stated that although special payments in June, influenced by summer bonuses, rose 3% from a year earlier, they still failed to keep pace with inflation.

Nominal total cash earnings in June grew 2.5% year-on-year to JP¥511,210 (US$3,476), accelerating from the 1.4% rise in May (revised) and marking the largest increase in four months. Basic wages rose 2.1%, and overtime pay increased by 0.9%.

The data raised concerns about Japan's prospects for a consumption-driven recovery. With core inflation already exceeding the Bank of Japan's target, there may be room for the central bank to raise interest rates. However, factors such as geopolitical tensions and tariffs are exacerbating economic risks.

Zelenskyy supports U.S. ceasefire initiative, calls for sanctions on Russia

On August 5th, Ukrainian President Volodymyr Zelenskyy said in his regular evening video address that he had spoken with U.S. President Donald Trump that day, with the most important topic being how to end the Russia-Ukraine conflict as soon as possible. Zelenskyy said, "We in Ukraine fully support the U.S. proposal for an immediate ceasefire." To achieve this, Ukraine has explored various options and forms of dialogue, including proposing an air ceasefire initiative to Russia, a complete halt to missile and drone strikes as well as attacks on civilian infrastructure, particularly energy systems. However, Russia has repeatedly and blatantly violated these agreements.

Trump says tariffs on pharma, chips to be announced in 'next week or so'

U.S. President Donald Trump said he expects to announce taxes on the imports of pharmaceuticals, semiconductors and chips "within the next week or so". Currently, the administration is preparing to target key sectors of the economy as part of its efforts to reshape global trade. The tariffs on medicine would initially begin at a "small" rate but then rise to 150% within 18 months and eventually increase again to a rate of 250%. Trump also added: "We want pharmaceuticals made in our country," announcing new tariffs on semiconductors and chips.

Russia reportedly considers an air ceasefire, but is unlikely to agree to a full truce

Although Russia remains firmly committed to advancing its military operations, the Kremlin is considering making concessions to U.S. President Donald Trump, which may include agreeing to an air ceasefire with Ukraine in an attempt to avoid secondary sanctions. Sources familiar with the matter said that although expectations for a successful agreement remain low, this week's visit by U.S. Special Envoy for the Middle East Steve Witkoff to Russia is seen by Moscow as one of the last opportunities to reach a deal with Trump. One of the sources noted that a potential de-escalation proposal could involve a pause in airstrikes, including those involving drones and missiles, but only if Ukraine also agrees to sign on. However, Russian President Vladimir Putin is unlikely to agree to a full ceasefire in Ukraine, as Russian forces continue to make steady advances on the battlefield and Moscow's strategic objectives remain unchanged.

U.S. ISM data fuels stagflation concerns

Data released by the Institute for Supply Management (ISM) showed that the U.S. ISM Services PMI for July came in at just 50.1, down from 50.8 in June and below the expected 51.5. The figure indicates that the services sector is nearly stagnant, with seasonal and weather-related factors negatively impacting business activity, alongside the effects of higher tariffs and a more cautious consumer sentiment. The report aligns with the warning signals currently emerging from the U.S. economy.

The employment index dropped to 46.4, falling below the 50.0 threshold for the fourth time in the past five months and hitting one of its lowest levels since the pandemic. The prices paid index, which measures the cost of materials and services, surged to 69.9, its highest level since October 2022.

Although the business activity index for the services sector remained in expansion territory, its value was lower than in June. The new orders index fell to 50.3, nearing stagnation. While still in expansion territory, the new orders index and a slight improvement in the backlog of orders underscored some resilience in the services sector. However, there is no doubt that tariffs are driving up input costs, which could become a future driver of inflation.

In July, 11 service industries reported growth, including transportation, wholesale trade, and finance. Seven industries contracted, primarily in the accommodation and food services sectors. The services sector is the largest component of the U.S. economy and has been driving growth this year, while manufacturing has contracted for five consecutive months.

Overall, although the headline PMI index still indicates expansion, the momentum of growth has clearly slowed. Some surveyed businesses cited negative impacts from seasonal factors and weather changes on operations, while transportation congestion has exacerbated supply chain pressures, which is one of the reasons behind the rise in the supplier deliveries index. The most frequently mentioned issue remained tariffs, with respondents noting that more goods have seen price increases recently, further adding to business cost burdens.

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UTC+8 17:00 Eurozone June Retail Sales MoM

UTC+8 22:30 U.S. EIA Crude Oil Inventories for the Week Ending August 1st

UTC+8 03:10 Speech by San Francisco Fed President Mary Daly

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