Swiss Franc Approaches 2-Year High

The Swiss franc appreciated past 0.9 per USD, approaching the two-year high of 0.88 touched on May 3rd amid repeated hawkish signals from the Swiss National Bank.

Despite evidence of slower inflation in the Swiss economy, concerns about upside risks to core price growth drove SNB Governor Thomas Jordan to flag another potential rate hike next week.

Additionally, sight deposits held at the SNB fell below CHF 510 billion in June, the lowest since 2016, indicating that the central bank is reducing liquidity in the Swiss economy and is determined to raise borrowing costs.

Swiss consumer prices rose by 2.2% annually during May, the least in 15 months and well below expectations from the central bank.