During the Asian session the US Dollar climbed to a two-week high against its Swiss rival, achieving 0.9345, and as European trade began the CHF/USD pairing was little changed.
The safe-haven Franc experienced minimal movement as the morning progressed, largely unaffected by the publication of Switzerland’s real estate index for family homes.
The Swiss Franc exchange rate was in the region of 0.9341 against the US Dollar as of 12:35 GMT
In recent days investors have been focused on Japan and the G-20 summit. After the group of 20 finance ministers and central bank heads refrained from criticising the Bank of Japan’s decision to double monthly bond purchases (a course of action which led to the Yen weakening by over 5.5 per cent) the Yen’s tumble continued.
Meanwhile, achieving Italian political stability came a step closer on Saturday following the re-election of the nation’s President. The Euro was bolstered as a result, causing the Swiss Franc to post a slight decline against its common currency rival.
Over the weekend Thomas Jordan, Chairman of the Swiss National Bank, asserted that in light of recent global economic setbacks the Franc’s exchange rate cap remains essential.
Economist Reto Huenerwadel supported this position, stating: ‘This is clearly not the time to look for an alteration of the Swiss National Bank’s monetary framework anytime soon. With the weekly update on the overall CHF sight deposits at the SNB likely to see an incremental change once again, the data suggest that any such assessment is widely accepted by market participants around the globe.’
However, the Franc is likely to experience notable movement as the week progresses following the publication of several pieces of volatile economic data, not least tomorrow’s German PMI figures and Wednesday’s IFO monthly business survey.
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