The Swiss franc strengthened today on the speculation the Swiss National Bank will refrain from raising the ceiling for the currency in the near future.
The SNB may be unwilling to further weaken the franc because an increase of the cap for the currency is virtually the only instrument it has left in case the threat of deflation would materialize. The case for weakening the nation’s currency is strong, however, amid the mounting signs of slower growth and the central bank may be forced to intervene again. SNB Vice President Thomas Jordan declined to answer directly whether the central bank is going to intervene, saying on November 7:
Our mandate is very clear: We need to deliver price stability and make a contribution to the stabilization of the economy. We are monitoring the situation permanently. We are analyzing it and if there is a reason to act, we are obviously ready to take further measures.
USD/CHF fell from 0.9093 to 0.9041 today as of 12:31 GMT. EUR/CHF traded at 1.2305 after opening at 1.2315 and rising to the daily high of 1.2383.
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