The safe-haven status of the Swiss franc and Japanese yen faces increasing uncertainty, positioning the US dollar to benefit from this shift.

The Swiss franc declined against the dollar following the imposition of high tariffs by the United States on Swiss products. Given that policymakers have been managing the currency's strength throughout the year and have reduced interest rates to zero, the central bank is unlikely to intervene to support the currency. Swiss authorities may actually welcome franc weakness, particularly considering that currency depreciation helps absorb the impact of tariffs and supports exporters. The Swiss franc ranked as the second-worst performer among G-10 currencies today.

Meanwhile, the Japanese yen has failed to fill this safe-haven void. The Bank of Japan maintained interest rates unchanged and adopted a dovish stance at this week's press conference, providing no information regarding the timing of potential policy tightening. Japanese officials expressed concerns about yen weakness on Friday. The yen previously broke below 150 against the dollar, with traders now monitoring the 155 level as the next threshold that could prompt government intervention.

As the Swiss franc and Japanese yen lose their safe-haven currency status - at least in the near term - the dollar faces a clear window for gains. Earlier this year, Trump's tariff threats undermined the dollar's safe-haven position as investors weighed US policy risks against global uncertainties. However, the August 1 tariffs have now strengthened the dollar's position, clarifying to some extent America's relatively strong stance in trade dynamics.