Swiss Franc (CHF) – The CHF has been extremely resilient the last month, breaking out with significant strength versus all major currencies including the New Zealand Dollar, NZD. It even registered a world-leading 0.23% increase overall, testament to its stability in an otherwise tumultuous market. While this supremely well timed performance follows the surprise release of Switzerland’s last producer-level inflation figures that have offered really strong backup for the Franc.
The Swiss Franc was down versus its Australian counterpart, losing 0.27%. It went on to add 0.22% against the Canadian Dollar in this deep dive. It recorded a small increase of 0.09% relative to the US Dollar. In spite of these advances, the Franc suffered marginal depreciations against other key currencies. It fell 0.03% from the Euro and was down 0.00% versus the British Pound.
Other recent economic data reveals that in October, Switzerland’s Producer and Import Prices fell 1.7% y/y. This drop represents worsening producer-level deflation in the country for the 30th consecutive month. Furthermore, on a month-over-month basis, these prices dropped by 0.3%. The persistent recent deflationary trend has very much favored the Swiss Franc. This strength is what allows it to maintain its hegemonic position in the global currency market.
The Franc was down 0.22% versus the US Dollar and down 0.27% vs the Canadian Dollar. It proved its worth by gaining 0.29% to the Kiwi Dollar. Further complicating matters, this mixed performance illustrates the complex and often contradictory impact of currency fluctuations and the deep economic realities driving them.
The Swiss economy’s underlying stability remains key to keeping the Franc strong. While the country continues to deal with a reality of deflation, investors are careful but hopeful about the currency’s performance. The Swiss National Bank (SNB) has been responsibly fighting these disastrous economic effects. Their aim is to bring hyper-inflation under control and create conditions for economic growth.