- 13 Feb 2024 4:50 pm CET
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Following the announcement of inflation data in Switzerland and the USA, the Swiss franc fell significantly against the main currencies, the US dollar and the euro. It fell to a three-month low against the US currency and to a two-month low against the EU currency.
On Tuesday evening, one US dollar cost around 88.7 centimes, having been more than a centime lower at 87.6 in the early morning. The current level corresponds to the lowest level against the dollar, also known as the greenback, since mid-November.
Meanwhile, one euro cost a good 95 centimes in the evening after 94.3 centimes in the morning. The last time the euro/franc pair traded well above the 95 mark was in mid-December.
For once, two effects weakened the franc. In the morning, it was the local inflation figures for January. Swiss inflation fell to 1.3 percent from 1.7 percent in December. This significant fall came as a big surprise. Economists surveyed by the news agency AWP had previously expected an inflation rate in the range of 1.5 to 2.2 percent.
The significant decline in turn means that the Swiss National Bank's (SNB) first move to cut interest rates may come sooner than previously expected. The SNB could even be the first central bank of the G10 countries to cut interest rates in this monetary policy cycle, according to one analyst.
This may already happen at the SNB's next monetary policy assessment on March 21 - various observers expect this to be the case. As this would widen the interest rate differential to the detriment of the Swiss franc, the franc came under pressure today.
There was a second effect in the afternoon. In the US, the opposite happened: although January inflation also fell to 3.1% from 3.4%, this was less pronounced than experts had expected. This also means that the Fed's first interest rate cut will come later rather than sooner, which in turn boosted the US dollar today - also against the euro.