- Swiss franc among the worst on Friday.
- USD/CHF is headed for a weekly loss, but off the lows.
- EUR/CHF extends rebound and nears parity.
The USD/CHF it’s up on friday but still down all week. The pair jumped to 0.9234, hitting a two-day high before pulling back to 0.9200, amid a weaker US dollar.
On a weekly basis, the pair fell less than 50 pips after recovering from 0.9080. A weekly close far from the bottom shows some difficulties for the Swiss franc to extend the rally.
The dollar lost momentum after a correction in London and the US economic data. Existing home sales fell to 4.02 million in December from 4.08 million in December, above the market consensus of 3.96 million.
Kansas City Federal Reserve President Esther George said Friday that the U.S. economy is responding to the Fed’s actions. She added that it was encouraging to see inflation falling, but warned that she needed to be more patient in assessing whether inflation was on a sustainable downward path.
President of the Swiss National Bank (SNB). Thomas Jordan said on Friday that “the absolute priority should be to reduce inflation to the level of price stability”. He added that he would not hesitate to restore negative interest rates to deal with negative inflation.
Analysts at Commerzbank forecast USD/CHF to move higher in the coming months, reaching 0.95 by June, and predict that it will end the year at 0.94 and resume growth in 2024.
EUR/CHF rose sharply on Friday, with EUR/CHF once again approaching parity. “Inflation in Switzerland has become more moderate recently, which means that the SNB may soon have reached the end of its rate hike cycle. The ECB, on the other hand, is likely to slow down monetary policy for a bit longer. We have therefore adjusted our EUR/CHF forecast slightly upwards,” said the Commerzbank analyst. He sees the cross at 1.01 in June and 1.02 in September.