(BFM Bourse) – The Swiss franc has reached its highest level since 2015 against the dollar, due to differences in the signals sent by the Swiss National Bank and the American Federal Reserve on the future of their monetary policy.
The Swiss franc was up sharply on Friday against the main currencies, in particular against the dollar, benefiting from more pronounced market expectations of rate cuts from other central banks than the Swiss Monetary Institute.
The Swiss currency is currently up 0.33% against the greenback, at 0.8533 Swiss francs per dollar, after touching 0.8530 Swiss francs, the highest against the dollar since January 2015.
It also strengthened by 0.22% against the single European currency, to 0.9408 Swiss francs per euro. The Swiss franc also moved in the positive direction against the yen and the British pound.
“The Swiss franc finds support as the gap widens between the guidelines issued by the Swiss National Bank (SNB) and the Federal Reserve (Fed),” summarized Ricardo Evangelista of ActivTrades, interviewed by AFP.
Divergent expectations
Last week, the Swiss central bank kept its key rate unchanged at 1.75%, without revealing when it might consider lowering rates.
If the Fed and the European Central Bank (ECB) also chose the status quo during their last respective meeting, analysts are counting on a rate cut from the first quarter of 2024.
Investors believe that the Swiss central bank “will maintain higher interest rates for longer” than its peers, argues Ricardo Evangelista.
“This dynamic has intensified in recent days, particularly against the dollar,” continues the analyst, after the statements of the Fed which is now openly considering rate cuts next year, and also following the downward revision on Thursday of growth in gross domestic product (GDP) of the United States in the third quarter, at 4.9% at an annualized rate.
(With AFP)
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