• am3025

CHF Currency Report | Dec 17th 2020

The Swissie (CHF) has appreciated 0.76% this week to $1.131/USD against a weaker US dollar, today reaching its strongest level since January 2015. The CHF|USD pair saw monthly volatility at 1.89%, and annual volatility at 6.55%, as seen on Deaglo’s spot history chat below. If your business or fund is exposed to this pair, implementing a layered hedging strategy can reduce your annual volatility down to 1.65%, making forecasting profits far more accurate.

Macroeconomic data front | the Balance of Trade for November increased to CHF3.1B, from CHF2.9B the month prior. The current surplus is bad news for the CHF as it could affect the supply for foreign exchange. The high demand for CHF could result in further appreciation. This is bad news for Switzerland’s large export business who has struggled with a strong CHF since March 2020.

The SNB announced this morning that interest rates would remain at -0.75% (the lowest in the world according to Reuters), in order to combat negative inflation rates plaguing Switzerland’s economy since February 2020. Switzerland is no stranger to negative inflation, as seen in the graph below.

Upcoming events likely to influence the CHF are:

  • Current Account Q3 (due 18 DEC);

  • SNB Quarterly Bulletin (due 23 DEC)

SNB | Yesterday, the U.S. Treasury labeled Switzerland a currency manipulator. However, the Swiss National Bank seemed unphased at the title of “currency manipulator”, promising on Thursday to push forward with their expansive monetary policy and forex interventions in order to soften the impact of the coronavirus pandemic. SNB Chairman Thomas Jordan confirmed the central bank had made “considerable foreign exchange purchases this year,” but remained silent on the degree of interventions during the latter half of the year. Read more here.

17 views0 comments
Deaglo white logo.png
  • LinkedIn - White Circle

All statements of opinion and/or belief contained in this website and all views expressed represent Deaglo Partners LLC's “Deaglo” own assessment and interpretation of information available to it at the date of this website. The information contained in this website is based on publicly available information only, from third-party sources. Deaglo does not represent that it is accurate, timely, comprehensive or complete and it should not be relied upon as such, nor has it been independently verified. No reliance may be placed for any purposes whatsoever on the information contained in this website. Under no circumstances should the information provided in this website be considered as investment or trading advice, or as a sufficient basis on which to make any investment or trading decisions and is provided to you for information purposes only. Whilst this website has been prepared in good faith, Deaglo and its group undertakings, members and employees from time to time (“Affiliates”) do not make and are not authorized to make any representation, warranty, or undertaking, express or implied, with respect to the information or opinions contained in it and no responsibility or liability is accepted by any of them as to the accuracy, completeness or reasonableness of such information or opinions or any other written or oral information made available to you. Without prejudice to the foregoing and to the fullest extent permitted by law, Deaglo and its Affiliates do not accept any liability whatsoever for any loss however arising, directly or indirectly, from use of this website or otherwise arising in connection therewith. Nothing herein shall not exclude any liability for, or remedy in respect of, fraud or fraudulent misrepresentation. Our professionals may provide oral or written market commentary or trading strategies to our clients. Deaglo will not treat recipients as clients by virtue of their receiving this report. Data may be subject to updates and corrections without notice. No part of this material may be (i) copied or duplicated in any form by any means or (ii) redistributed without the prior written consent of Deaglo.