EUR Is Weakest in 18 Months Versus the CHF

CHF Exchange Rate

              CHF exchange rate is on the rise, as there is observed a demand for safe-haven currencies. The euro recorded an 18-month low level versus the Swiss franc, hitting 1.05235, down 15%. The reason for that are growing global economic fears triggered by yet another COVID-19 wave and rising inflation in many parts of the world. As the CHF is considered a natural hedge against inflation, many investors are deciding now to buy Swiss francs. The euro meanwhile is in trouble also versus US, as its exchange rate hit the lowest point in 16 months, being down 0.29% to 1.1409 dollars.

CHF Still Safe-Haven Asset

              Commenting on the CHF exchange rate and inflation, Swiss National Bank (SNB) governing board member Andrea Maechler said the currency rises are capped by relatively modest Swiss inflation of annual rate of around 1.2%. This inflation has reduced the potential damaging effect the very strong exchange rate of CHF might have had on Swiss export and economy. She also stated again that the SNB is committed to making interventions on currency market if needed. These interventions are aimed at limiting the impact of the strong CHF exchange rate on the export-driven Swiss economy. "We are still in a territory where the Swiss franc is high. More generally, how is it (the franc) going to go further? I don't know. I don't know where the Swiss franc is going to go” – said Maechler. She was also defending the stance that CHF is a safe-haven currency, and thus there is high demand for it due to global uncertainties. The SNB remains committed to making interventions on exchange rate market when appropriate, but with making the minimum market impact. "You've seen recently there has been quite an appreciation of the Swiss franc," Maechler added. "Now if you look at the real exchange rate, it's still higher than 2015, "It is something that we do continue to monitor, and we will continue to do so."

USD on the Rise

              Meanwhile, the other safe-haven currency that has been on the rise recently is US dollar. It hit a 16-month high versus the basket of other major currencies. The dollar index performance on Monday was at 95.287. The good exchange rate of USD was triggered by global growth and inflation concerns, the same that influenced high price of CHF.