Dollar sinks to multi-year low against the franc
Published: Friday, Dec 22nd 2023, 16:21
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On Friday, the US dollar traded at its weakest level against the Swiss franc since the minimum euro exchange rate was abandoned in 2015. In the afternoon, the US currency traded at a new multi-year low of CHF 0.8513, just above 85 centimes.
At the same time, the euro also weakened against the franc: In the afternoon, the single currency even briefly fell below the 94 centime mark before recovering somewhat to a level of 0.9407 francs.
The current significant weakness of the dollar is probably due not least to the recent disappointing data from the US economy. The likelihood that the US central bank, the Fed, will cut interest rates in the coming year is supported by this, according to the market. The dollar is suffering from the development because the prospect of lower interest rates is damaging the attractiveness of investments in the US.
The Swiss franc has strengthened significantly against the major currencies this year. In addition to the currency's traditional function as a "safe haven", the Swiss National Bank supported the franc over the course of the year by selling foreign currency. With the strong franc, it was able to prevent high inflation from being imported from abroad.
However, the monetary authorities changed their foreign exchange policy last week in view of the declining inflation figures. The SNB wants to remain active on the foreign exchange market if necessary, explained SNB Chairman Thomas Jordan at the latest assessment of the situation. However, currency sales would "no longer be a priority".
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