SWISS FRANC EXTENDS LOSSES AS SNB UNLIKELY TO RAISE INTEREST RATES
- The Swiss Franc edges lower against the US Dollar on the back of relatively low inflation in Switzerland, which indicates interest rates remaining low.
- SNB’s Jordan says Swiss Franc rising in real terms is hurting Swiss exporters, SNB unlikely to pursue CHF-strengthening policies.
- USD/CHF hits resistance at falling trendline, 50-week SMA.
The Swiss Franc (CHF) edges lower against the US Dollar (USD) on Wednesday as traders continue to bet on a less-inflationary outlook for Switzerland, supporting a relatively low interest rate policy and dampening foreign capital inflows.
Inflation figures from Switzerland’s Federal Statistics Office released on Monday showed prices rising 1.2% in February, down from the 1.3% increase in January. Whilst not as low as the 1.1% forecast by economists, the data extended the trend lower in inflation, and positions the neutral country as one of the least inflationary in the western world.
Declining inflation suggests the Swiss National Bank (SNB) will not have to raise base interest rates from the current 1.75% level in order to combat inflation, which in turn is likely to lower demand for the Swiss Franc from foreign investors seeking to park their capital where it can reap the highest return.
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