The Swiss franc was at the 0.96 per USD level, depreciating from the 2-month high of 0.949 touched on June 29, tracking the momentary retreat of safe-haven assets. Still, higher than expected inflation data strengthened expectations of further hikes by the SNB. Annual inflation rose to 3.4% in June, the highest since 1993 and above the central bank’s expectations of 3.2% for Q3. The CPI readings support Chariman Jordan’s remarks that more rate hikes will be needed to curb inflation back to the 2% target, as the latest forecasts project price growth to only normalize by 2025 at the current borrowing costs. In its last meeting, the SNB unexpectedly increased its key policy rate by 50bps. It was the central bank's first rate hike since 2007 after holding the rate at the record low of -0.75% since 2015. 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.
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 July 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.