The Swiss franc strengthened further to the 0.95 per USD level in late June, the highest in two months, supported by a flight to safe currencies amid recession fears and a hawkish Swiss National Bank. Chairman Jordan said that more interest rate hikes will be needed to curb Swiss inflation back to the 2% target, as the latest inflation forecasts project price growth to only normalize by 2025 at the current borrowing costs. At the same time, Swiss overnight sight deposits fell by its largest amount in more than a decade, suggesting the central bank is no longer capping the franc’s appreciation. In its last meeting, the SNB unexpectedly increased its key policy rate by 50bps. It was the first rate hike by the SNB since 2007 after holding the rate at the record low of -0.75% since 2015. In the meantime, the franc crossed parity with the euro for the first time since January of 2015.
Historically, the Swiss Franc reached an all time high of 4.32 in January of 1971. Swiss Franc - data, forecasts, historical chart - was last updated on June of 2022.
The Swiss Franc is expected to trade at 0.97 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 1.01 in 12 months time.