Swiss Franc shrugs after SNB’s Jordan comments

The Swiss franc is steady on Friday. In the European session, USD/CHF is almost unchanged at 0.9118.

It has been quite a ride for the Swiss franc, which hit eight-year highs against the US dollar in the last week of 2023. The US dollar has roared back in 2024, surging 8.2% against the Swiss currency. The sharp depreciation of the Swiss franc has not been an unwelcome development for the Swiss National Bank, as it makes Swiss exports more competitive on world markets. The SNB didn’t mind when the Swiss franc was at high levels late last year, as this helped keep inflation in check at a time when the central bank was concerned that inflation might breach the 0% to 2% target.

The SNB lowered interest rates in March, the first major central bank to do so. The SNB is expected to follow through with two more cuts in June and September, although SNB President Jordan sounded cautious in a speech on Thursday. Jordan noted the global environment uncertainty and said that the SNB would adjust its monetary policy again “if necessary.”

Switzerland’s inflation has been stable and the economy is in good shape, which allowed the SNB to cut rates in March. The Credit Suisse Economics Expectations index, released this week, rose to 17.6 in April, its third consecutive acceleration after more than two years in negative territory (the zero level separates optimism from pessimism).

All eyes will be on the US Core PCE Price Index, which will be released later today. The index, which is the Federal Reserve’s preferred inflation gauge, is expected to ease to 2.6% y/y in April, down from 2.8% in May. On a monthly basis, the index is expected to remain unchanged at 0.3%. Consumer inflation has been rising in the US, forcing the Fed to delay plans to cut lower rates.

USD/CHF technical

• USD/CHF is putting pressure on resistance at 0.9137. Above, there is resistance at 0.9155.

• 0.9104 and 0.9086 are providing support.