The USD/CHF pair surges to a fresh two-week high near 0.8900 as Swiss France (CHF) dives after the Swiss National Bank (SNB) surprisingly reduces its key borrowing rates by 50 basis points (bps) to 0.5%.
USD/CHF jumps to near 0.8900 as the SNB cuts its key borrowing rates by 50 bps to 0.5% against estimates of a 25 bps interest rate reduction. SNB Schlegel kept the option of negative interest rates on the table in his last commentary in November. An expected growth in the US inflation pushes Fed rate cut bets to the threshold. The USD/CHF pair surges to a fresh two-week high near 0.
Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone. Why is the Swiss Franc considered a safe-haven currency? The Swiss Franc is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress.
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