The franc reached parity with the euro overnight from Sunday to Monday, fully playing its role as a safe haven in a context of escalating armed conflict in Ukraine.
The Swiss currency had last crossed this bar in 2015 following the abandonment of the floor rate by the Swiss National Bank (SNB).
Around 2:20 a.m., the Swiss currency reached 0.9973 francs for one euro before relaxing somewhat. At 06:15, the currency pair was trading at 1.00060 EUR/CHF.
It is currently not known whether and to what extent the SNB is active in the foreign exchange market in order to curb the appreciation of the franc. To find out, it will probably be necessary to wait for the publication of the last report of sight assets of the issuing institute, scheduled for Monday.
For the guarantor of monetary stability, too strong a franc might quickly lead to the dreaded deflation, warn the forex traders of the Valiant bank. The question now is to know where the tolerance threshold for the appreciation of the franc will be for the monetary authority. The experts of the Bernese establishment place the latter at parity with the euro.
If the turbulence linked to the war in Ukraine were to calm down quickly, which currently seems unlikely, the franc might catch its breath, according to specialists at Raiffeisen. In the medium term, a tightening of monetary policy by the European Central Bank (ECB) might also support the euro.
This article has been published automatically. Source: ats/awp
