USDCHF Analysis – December 18, 2023

USDCHF Analysis
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USDCFH analysis – Recently, the Swiss franc reached a new high against the US dollar, surpassing 0.87. This is the strongest it’s been since the end of July. Several factors contributed to this rise. Firstly, the US dollar showed some temporary weakness. Secondly, the Swiss National Bank (SNB) played a significant role in boosting the franc’s value.

The Federal Reserve in the United States hinted at a possible decrease in interest rates for the upcoming year. This suggestion came from the Fed’s latest meeting, where a more cautious outlook was presented. As a result, the value of the US dollar dropped, as investors adjusted their expectations. Meanwhile, the SNB has been actively supporting the Swiss franc. One of their strategies includes selling off foreign currency reserves. This move helps to manage the impact of fluctuating commodity prices. It also helps to control inflation from imports, which is a major concern in Europe at the moment.

The latest statistics reveal that the SNB’s foreign exchange reserves have been decreasing for six consecutive months. This reduction in November brought the reserves to their lowest level in seven years. In terms of policy, the SNB made a significant decision last week. They chose to keep their key interest rate the same. The central bank noted that, even though inflation in Switzerland is slowing down, there are still risks of high inflation in the future.

USDCHF Analysis

USDCHF Analysis – Daily Chart

Source Reuters.