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by USD/CHF—The Swiss franc recently traded around 0.9 per USD, marking its lowest level in five weeks. This movement reflects traders’ responses to the latest monetary and economic trends. Switzerland’s inflation rate in June was unexpectedly low at 1.3%, down from 1.4% in the preceding two months. This lower inflation figure influences the Swiss National Bank’s (SNB) monetary policy decisions.
USDCHF Fundamental Analysis – 18-June-2024
SNB Cuts Key Interest Rate Again
In response to the decreasing inflation, the SNB cut the key interest rate by 25 basis points for the second consecutive meeting. This action contrasts with other major central banks like the Federal Reserve (Fed) and the European Central Bank (ECB). The Fed has not eased its monetary policy yet, and the ECB remains cautious about reducing borrowing costs.
Declining Dollar Signals Fed Policy Shift
Meanwhile, the U.S. dollar has been declining since late June. This downward trend is driven by growing expectations that the Fed will lower borrowing costs this year. As traders anticipate a shift in the Fed’s stance, the dollar’s value has been under pressure.
USDCHF Fundamental Analysis – 18-June-2024
Switzerland’s lower-than-expected inflation, the SNB’s rate cuts, and the Fed’s potential policy changes shape the current currency market. Investors should monitor these economic indicators and central bank actions to make informed decisions. The ongoing developments could signal further adjustments in exchange rates and monetary policies globally.
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