CHF in the markets
The Swiss National Bank continues to reaffirm its commitment to an ultra-loose monetary policy, which includes negative interest rates and a willingness to intervene in FX markets, as part of an effort to spark inflation in the economy.
The SNB will be unhappy, therefore, with the franc’s strength in May.
Between April-23 and May-24 (the day of this report), the franc was the best performing G10 currency; it gained 2.2 percent against the euro, taking EUR/CHF back towards Fr1.12 and close to long-term lows (franc highs).
May’s strength reflected worsening sentiment towards the global economy, driven by a significant escalation in US-China trade tensions. As a safe haven, the franc typically gains value during tough times and sinks when investors gain confidence.
The franc is unlikely to strengthen beyond Fr1.10 per euro, given the SNB’s eagerness to safeguard that level, a Nordea analyst said in May. For this reason, favour higher EUR/CHF rates over three- and six-month horizons, possibly as high as Fr1.16.
Swiss franc – Historical Rates
|7 Day||+0.1%||0.9672||14 Jan 2020|
|30 Day||-1.4%||0.9823||22 Dec 2019|
|3 Month||-2.2%||0.9904||23 Oct 2019|
|1 Year||-2.9%||0.9976||21 Jan 2019|
|5 Year||+11.2%||0.8707||22 Jan 2015|
|10 Year||-7%||1.0408||23 Jan 2010|
*For period to 21-Jan 21UTC when USD/CHF was 0.9684
You can also read our full Foreign Exchange Guide to Switzerland.
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