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by The Swiss Franc strengthened to about $0.840 (USD/CHF) against the US dollar, hitting levels not seen since the beginning of the year. This rise is due to a weaker dollar linked to growing concerns over the US economy.
A recent jobs report showed disappointing results, making people wonder if the Federal Reserve might lower interest rates three times this year instead of twice.
USDCHF Fundamental Analysis – 6-September-2024
Economic Worries Lead to a Safety-First Approach
Fears of a slowing economy have led many investors to look for safer investment options. The Swiss Franc is often seen as a safe-haven currency in uncertain times, making it more attractive to investors.
This flight-to-safety strategy helps explain the increased demand for the Franc.
Swiss Inflation Holds Steady, Rate Cuts on the Horizon
Switzerland’s annual inflation rate remained at 1.3% in July 2024, the same as the previous month. This figure met market expectations and added to the belief that the Swiss National Bank (SNB) might reduce interest rates for the third time this year in September.
Swiss National Bank’s Approach to Interest Rates
The Swiss National Bank has been ahead of other central banks in lowering interest rates. The SNB started cutting rates earlier in the year, and at both of its policy meetings this year, it decided to reduce borrowing costs.
This proactive stance has helped position Switzerland as a leader in managing inflation and economic stability.
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