knee-sh.
Both forms are correct as the English dictionaries of English allow for both. It's only the USA that seems to drop the soft sh sound, and when it comes to proper English pronunciation I ignore anything the USA does differently to the mother country.
Proper English pronunciation rules would suggest with a silent "e" on the end you should pronounce the word with the long i sound, so n-eye-ch, i.e. the i sound in pirate.
If niche was spelt nich, like rich then I would pronounce it nitch. But it's spelt niche, like riche (as in nouveaux riche) so I pronounce it neesh.
There are a lot of words in English that end in "che" and they have variable pronunciations, including "k" "sh" "ch" and "che".
“The fundamental cause of the trouble is that in the modern world the stupid are cocksure while the intelligent are full of doubt.” - Bertrand Russell
"When the power of love overcomes the love of power, the world will know peace."
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