The Swiss franc, as well as other safe currencies like the US dollar and the Japanese yen, were extremely strong on Tuesday amid speculations whether the Federal Reserve will cut interest rates this year and how much. Domestic macroeconomic data was also supportive of the Swissie.
Friday’s better-than-expected nonfarm payrolls made traders question whether the Fed will cut rates anytime soon. Market participants wait for Fed Chair Jerome Powell to shed light on the matter. Powell did not mention anything about interest rates today but may do so tomorrow. For now, markets continue to price in a 100% chance of an interest rate cut this month and about 60% chance of another cut in September.
Switzerland’s State Secretariat for Economic Affairs reported that the unemployment rate fell to 2.1% in June from 2.3% in the previous month, without adjustments for seasonal variations. Markets were expecting a smaller decrease to 2.2%. With seasonal adjustments, the unemployment rate remained at 2.3% versus expectations of an increase to 2.4%.
USD/CHF was at 0.9936 as of 22:40 GMT today, near the opening level of 0.9937. EUR/CHF fell from 1.1144 to 1.1135. CHF/JPY rose from 109.37 to 109.57.
If you have any questions, comments, or opinions regarding the Swiss Franc, feel free to post them using the commentary form below.
