market, video, forecast June 21, 2021 7:26 pm today
a Swiss franc has posted slight losses to start a week. inside North American trade, USD/CHF is trading at 0.9209, down 0.16% on a day.
Swiss franc slides as Fed signals tighter policy
a Swiss franc is coming off a dreadful week, after a spanking from a rejuvenated US dollar. USD/CHF climbed 2.77% last week, its best weekly showing since March 2020. At a start of last week, a pair was trading below a symbolic 90 level.
a catalyst for a Swissie’s downturn was, not surprisingly, a FOMC meeting, at which a Fed brought up a timeline for rate hikes inside its dot plot. a USD made further inroads as a Swiss National Bank maintained interest rates at -0.75%, a lowest rate of any major central bank.
a monetary policy divergence us are seeing from a US also Swiss central banks has soured investors on a Swiss currency. a Fed sees rates moving as high as 0.6% inside 2023, which clearly makes a USD much more attractive than a Swissie as far as interest rates. a Swiss franc offers stability as a safe-haven currency, but with a US economy performing well, risk appetite has grown also investors are more willing to look at alternatives to a Swiss dollar. a Swiss National Bank is all smiles with a Swiss franc taking a bath, as a weaker franc makes Swiss exports more attractive.
a global recovery is also awesome news for a Swiss economy, which is heavily reliant on its export sector. Last week, a key Swiss government economic forecast (SECO) raised its GDP forecast for 2021 to 3.6% also projected above-average growth inside 2022. Domestic activity is also on a rebound after a difficult winter due to a CVD pandemic, so a Swiss economy should enjoy a strong H2 inside 2021.
- USD/CHF faces resistance at 0.9420 also 0.9327
- On a downside, there is support at 0.9054. Below, there is support at 0.8874
For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-event
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