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
|1 Day||-0.6%||0.9719||08 Apr 2020|
|7 Day||-0.8%||0.9745||02 Apr 2020|
|30 Day||+3.1%||0.9369||10 Mar 2020|
|3 Month||-0.7%||0.9728||10 Jan 2020|
|1 Year||-3.6%||1.0022||10 Apr 2019|
|5 Year||-1.4%||0.9796||11 Apr 2015|
|10 Year||-8.8%||1.0597||12 Apr 2010|
*For period to 09-Apr 21UTC when USD/CHF was 0.9663
You can also read our full Foreign Exchange Guide to Switzerland.
Currency rates were extremely volatile last week as the coronavirus situation worsened day by day with various countries implementing ever-tougher measures to stop the spread of the disease.
Last update: 23 Mar, 2020
This week the US Dollar was touching three-year highs when valued against a basket of major currencies. The greenback’s traditional role as one of the safe-haven currencies is helped by a domestic economy that is largely immune to the threats of the coronavirus.
Last update: 22 Feb, 2020
The strong start to the year for “risk-on” currencies is already a distant memory.
Posted: 3 Feb, 2020
The threat of a proxy war between the US and Iran in Iraq has pared back some of the recent gains of “risk-on” currencies.
Last update: 8 Jan, 2020