Swiss Franc Soars to New Highs against Dollar and Euro, Potential Rate Hike by Swiss Central Bank

2023-07-11 20:45:03

New York (awp/afp) – The Swiss franc hit highs once morest the dollar and the euro on Tuesday, helped by its status as a safe haven but also by the prospect of a possible rate hike by the Swiss central bank.

Around 8:15 p.m. GMT, the only franc still existing in Europe gained 0.64% once morest the greenback, at 1.1368 dollars for one Swiss franc. It rose to $1.1369, a first since early January 2021.

The Swiss currency also climbed to 1.0334 euros, a peak it had not visited for a month and a half.

For Marc Chandler, of Bannockburn Global Forex, the Swiss currency might benefit from the geopolitical context, which saw in particular Turkey accept Monday the principle of Sweden joining the North Atlantic Treaty Organization (NATO).

The entry was poorly received by Russia, for whom it will have “negative consequences”, according to Russian presidential spokesman Dmitry Peskov, who promised “planned and planned” measures in response.

This renewed tension would thus play for the Swiss franc, considered a safe haven.

For Joe Manimbo, of Convera, the acceleration of the Swiss Confederation’s currency is also due to the prospect of seeing the American central bank (Fed) end its tightening cycle following a last rate hike in July.

At the same time, economists are counting on a tightening of the Swiss National Bank (SNB) at its next quarterly meeting in September.

The lag also plays once morest the dollar once morest the pound, which on Tuesday recorded a fifteen-month high once morest the American currency, at 1.2935 dollars.

According to figures released on Tuesday, the rise in the average wage still reached 7.3% year on year in May in the United Kingdom, a pace much faster than in most Western economies and which raises fears of further rate hikes in the UK. Bank of England (BoE).

Operators are betting on a BoE key rate above 6% at the end of the year, much more than the Fed or the European Central Bank (ECB).

As for the euro, if it behaves well once morest the greenback, it is suffering once morest the Swiss franc due to degraded economic indicators in the euro zone, according to Joe Manimbo.

Tuesday price Monday price 8:15 p.m. GMT 9:00 p.m. GMT EUR/USD 1.1006 1.1001 EUR/JPY 154.47 155.46 EUR/CHF 0.9680 0.9739 EUR/GBP 0.8510 0.8553 USD/JPY 140 .35 141.31 USD/CHF 0.8796 0.8853 GBP/USD 1.2931 1.2861

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