The Swiss franc dropped against the US dollar today and slumped versus the euro for the fifth consecutive trading session on speculations that Switzerland’s central bank may implement negative interest rates.
The Swiss National Bank has introduced a cap on the euro-franc exchange rate last year and economists were speculating since then if the central bank is going to take additional drastic measures to support Switzerland’s economy. Credit Suisse announced that it will start charging interest to other banks for holding their franc deposits, spurring speculations if other banks, including the SNB, will follow suit. The franc was rising against the euro since the middle of September, but it reversed the rally on November 29 and was sharply falling since then, almost erasing all gains since September.
USD/CHF rose from 0.9260 to 0.9287 and EUR/CHF jumped from 1.2127 to 1.2145 as of 11:51 GMT today.
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