Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Swiss Franc Soars on SNB Warning, Jobless Claims

Published 06/09/2023, 04:13 AM
Updated 03/05/2019, 07:15 AM
  • SNB’s Jordan hints at a June rate hike
  • US jobless claims jump
  • Swiss franc climbs 1.2%

The USD/CHF is showing limited movement on Friday, trading at 0.8998. On Thursday, the Swissie surged higher, gaining 1.2%.

SNB’s Jordan signals more rate hikes are coming

It seems that Swiss National Bank head Thomas Jordan doesn’t miss an opportunity to warn the markets that inflation is too high in Switzerland. Just a week ago, Jordan stated that if core inflation became entrenched above 2%, it would be difficult to bring it back below this level. Jordan was even more explicit in his remarks on Thursday, warning that inflation “is more persistent than we initially thought” and that with rates at a low 1.5%, it wasn’t a good idea to keep rates low and face higher inflation later.

Jordan’s remarks were a clear signal that the SNB plans to raise rates at the June 22nd meeting. The Swiss franc jumped after the comments, climbing 1% and punching above the symbolic 0.90 line for the first time in two weeks.

Like other central banks, inflation has become the number one priority for the SNB, even though inflation is much lower than in the other major economies. The SNB, once known for its negative rates, has been aggressive, raising rates by 225 points in the current tightening cycle. Higher rates have pushed the Swiss franc higher, which the SNB would rather avoid as an expensive Swiss franc hurts the export sector. Still, this is the price the central bank is willing to pay in order to curb inflation back to below the 0-2% target.

US jobless claims jump

In the US, unemployment claims were higher than expected, leading to the US dollar beating a hasty retreat against its major rivals. It’s only one report, but there have been signs of cracks in the labour market, such as a spike in the unemployment rate. The Fed meets next week, and the unemployment claims could provide support for a pause, which is weighing on the US dollar.

USD/CHF Daily Chart

USD/CHF Technical

  • USD/CHF is testing support at 0.9103. Below, there is support at 0.9022
  • 0.9156 and 0.9237 are the next resistance lines

Original Post

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.