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05/08/24
60
CHF Hits Highest Versus EUR Since 2015
On Monday, the Swiss franc gained to the highest level versus the euro in close to a decade, as investors were drawn to the safe-haven currency due to tensions in the Middle East, concerns over U.S. and global growth, and heavy losses in stock markets.
Since the U.S. Federal Reserve kept interest rates unchanged last week, the franc has risen 3.5% versus the euro.
On Monday the franc rose to 1.0856 euros, the highest level since Jan. 2015, when the Swiss National Bank (SNB) abolished the cap it had against the euro.
An SNB spokesperson declined to comment on whether the central bank would intervene in markets to stop the currency’s appreciation or on the franc’s strength.
The SNB has reduced interest rates twice this year due to worries among Swiss manufacturers that the currency’s strength was pressuring their crucial export business.
Maxime Botteron, an economist at UBS said at a time that when the SNB cuts interest rates, the franc’s appreciation over the past few days may lead to the bank purchasing foreign currency.
Botteron added that if policymakers were however seriously worried about the currency’s strength, the bank at present still had scope to reduce its benchmark rate to lower than 1.25%.
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