USDCHF Analysis – The Swiss franc recently surged past 0.87 against the US dollar, reaching its highest value since the end of July. This increase was partly due to a temporary dip in the dollar’s value. Additionally, the Swiss National Bank played a significant role in supporting the franc. They did this by selling off their foreign currency reserves, a strategy aimed at managing the impact of fluctuating commodity prices and curbing import inflation. This approach is crucial in Europe, where they’re trying to control high price growth.
At the same time, members of the Federal Reserve in the United States hinted at a more cautious approach in their latest meeting. They suggested that there might be fewer interest rate hikes next year than previously expected. This speculation put pressure on the dollar, making it weaker.
The Swiss National Bank’s efforts appear to be effective. The latest figures show that their foreign exchange reserves have decreased for six consecutive months, dropping to the lowest level in seven years as of November. Despite this, the central bank decided to keep its key interest rate steady last week. They acknowledged that while inflation risks are still present, there’s been a noticeable slowdown in the country’s Consumer Price Index (CPI).