In European trade, the Swiss Franc showed signs of resilience against a basket of major currencies, marking a modest recovery from recent lows against the US Dollar as the greenback’s momentum waned.
However, despite these gains, the Swiss Franc remains perched near its lowest levels in six weeks against the US Dollar. This downward trajectory comes in the wake of disappointing Swiss growth data for the second quarter of this year, which has dimmed prospects of an interest rate hike by the Swiss National Bank (SNB) later this month.
The USD/CHF pair dipped by 0.2% to 0.8823, reaching a session high of 0.8858. This followed a 0.3% decline on the preceding Friday, marking the second consecutive loss. These losses were primarily attributed to the release of robust US payroll data in August.
Last week, the Swiss Franc had plummeted to its lowest point in six weeks against the US Dollar, touching 0.8875, as a result of a string of underwhelming Swiss economic indicators.
Swiss Economy
Recent Swiss data has revealed that GDP growth remained stagnant during the second quarter of the year, in stark contrast to the 0.3% growth rate registered in the preceding first quarter. These figures have cast doubt on the likelihood of another 0.25% interest rate hike by the Swiss National Bank during its forthcoming September meeting.
SNB
The Swiss National Bank had previously raised interest rates by 0.25% during the June meeting, elevating it to 1.75%, the highest level since 2008. This move was aimed at countering rising inflationary pressures.
Swiss inflation, as indicated by recent data, has steadied at 1.6% in August, underscoring the SNB’s success in maintaining inflation below the 2% medium-term target.
