CHF Down Vs Major Currencies Before US Elections

CHF Exchange Rate Fall

              Last week, the Swiss Franc ended lower or flat against the majority of other popular currencies, and also the beginning of this week was not so good for CHF exchange rate. On Tuesday, GBP vs CHF rose by 0.2%, as pair traded around 1.189 francs. The increase of GBP was due to the fact that CHF is negatively correlated with USD, and before the US election the country’s currency is strong which makes CHF weaker. Even the concerns for the UK’s economy that are a burden for GBP’s exchange rate didn’t influence its price so much that CHF could take advantage of it. Investors have been recently not in mood to risk, but while in last weeks they were eager to buy Swiss Francs, now the bad Swiss macroeconomic data triggered not so good exchange rate of CHF versus major currencies.

Swiss Economic Data

              At the end of month, as always, was published the Consumer Price Index for Switzerland. For October it fell by 0.6 year-on-year and remained flat month-to-month. The KOF Economic Barometer for October was 106.6, down from 110.1 in September and below the median forecast of 107.9. It was the first decrease of KOF Barometer after fourth months in a row of gains. Retail sales for September rose by 0.3% year-to-year, but it was significantly lower increase than the one predicted by analysts of 2.8%. Month-to-month retail sales contracted by 3.6%. Investors that keep or buy Swiss Francs are becoming more and more worried about the Swiss economy, that could post lower GDP for fourth quarter of the year, if the coronavirus cases continue to rise. Nearly 22,000 cases of COVID-19 were reported over weekend, which means perspective for the Swiss economy by the end of the year might be very gloomy. Also more restrictions are likely to be re-introduced soon.

What Is Next for CHF?

              What is next for CHF exchange rate? Surely, the outcome of US elections will have huge impact on foreign currencies market. Depending on the result, investors might feel like risking and turn to buy euros or other no safe-haven currencies, as well as get optimistic enough to send USD higher, which all will impact lower prices of CHF. That is possible scenario in case of Joe Biden’s victory, which is more probable, according to surveys. If there are any uncertainties whether who wins or any chances that Donald Trump might get reelected, investors won’t be buying USD, but instead turn to buy Swiss francs and other safe-haven currencies.