Spot prices currently trade around the 0. Any meaningful USD appreciation, however, seems elusive in the wake of bets for further policy easing by the Federal Reserve Fed. In fact, the markets are pricing in the possibility that the US central bank will lower borrowing costs twice by the end of this year. This, to a larger extent, overshadowed the ADP report showing that private-sector employment increased by K in January compared to the previous month's upwardly revised reading of K.
Apart from this, concerns about the escalating US-China trade war and the potential economic fallout from US President Donald Trump's trade tariffs could keep a lid on the market optimism. Hence, it will be prudent to wait for strong follow-through buying before positioning for any further gains. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy.
The Swiss Franc CHF is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in. The Swiss National Bank SNB meets four times a year β once every quarter, less than other major central banks β to decide on monetary policy. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate.
Higher interest rates are generally positive for the Swiss Franc CHF as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions.
