USD strength against CHF

What happened: The Swiss stock market ended lower on Friday, with the benchmark SMI shedding 0.71%, driven by a late-session sell-off. Meanwhile, U.S. President Donald Trump hinted at Russia's potential return to the SWIFT payment system, which could signal an end to sanctions against Russia. In the currency market, the USD gained against the CHF, with June Swiss franc futures hitting a two-month low.

Market impact: The USD's strength against the CHF negatively impacted the Swiss stock market, with the SMI closing lower. The potential easing of sanctions on Russia, as suggested by Trump, could lead to a risk-on sentiment in global markets, further boosting the USD and putting downward pressure on the CHF. This dynamic could continue to weigh on Swiss equities, particularly those with significant international exposure.

What to watch next: Investors should closely monitor the upcoming G7 meeting on June 8-9 for any further developments on Russia's potential reintegration into the SWIFT system. Additionally, the release of Swiss consumer price index (CPI) data on June 10 could provide insights into the Swiss National Bank's (SNB) future monetary policy, potentially influencing the CHF and, in turn, the Swiss stock market.