Swiss franc extends recovery from four-month trough after inflation data

Economies.com
2024-03-04 11:08AM UTC

Swiss franc rose in European trade on Monday against a basket of major rivals, extending gains for the second straight session against the dollar away from recent four-month lows.

 

The gains came following strong Swiss inflation data, with consumer prices rising above expectations, hurting the odds of a rate cut in March. 

 

USD/CHF

 

USD/CHF fell 0.25% today to 0.8806, with a session-high at 0.8838, after rising 0.15% on Friday, the first profit in three days off four-month lows at 0.8892. 

 

 Franc lost 0.3% last week, the fifth weekly loss in a row, as the Swiss National Bank gave up its policies of supporting the local currency to counter inflation. 

 

The SNB said last December that boosting the franc’s strength isn’t a priority anymore, with risks attached to forex intervention. 

 

Swiss Inflation 

 

Earlier data showed Swiss consumer prices rose 1.2% y/y in February, above estimates of 1.1%, while still down from 1.3% in January. 

 

On a monthly basis, consumer prices rose 0.6%, above estimates of 0.5%, and up from 0.2% in the previous reading. 

 

Such data could be slightly concerning to SNB policymakers and could delay the decision to cut interest rates. 

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