Swiss Franc: Is Upward Pressure Returning? (cross-border guide)

Context

In a nutshell

• The Eur/Chf exchange rate has gained more than 2% since the end of May, rising above 0.93 francs for the first time since January. - The Swiss franc has lost ground against the euro and the US dollar. - The Swiss National Bank confirmed the guide rate at 0% at its meeting on 18 June, in the face of inflation which stood at 0.6% year-on-year in May. - The ECB raised the three benchmark rates by 25 basis points, bringing the deposit rate to 2.25%. - The Fed could also move a couple of times by the end of the year, firming at 3.50-3.75%.

The Swiss franc lost ground against the euro and the US dollar, while the Swiss National Bank confirmed the lead rate at 0% at its meeting on 18 June. The ECB raised the three benchmark rates by 25 basis points, bringing the deposit rate to 2.25%.

The Eur/Chf exchange rate has gained more than 2% since the end of May, rising above 0.93 francs for the first time since January. The Swiss franc has lost ground against the euro and the US dollar.

ARTICLE TITLE: Swiss Franc: Are Upward Pressures Returning?

The currency market has been characterized by an upward trend for the Eur/Chf exchange rate, which has gained more than 2% since the end of May. This trend was fuelled by the confirmation of the Swiss National Bank's 0% lead rate at the June 18 meeting. Inflation, which in May stood at 0.6% on an annual basis, does not appear to be a

Operational details

Key facts

• What: Eur/Chf exchange rate
• When: from the end of May
• Where: foreign exchange markets
• Who: Swiss National Bank, ECB, Fed
• Amount: 2%, 0.6%, 2.25%

The Eur/Chf exchange rate has gained more than 2% since the end of May, rising above 0.93 francs for the first time since January. This increase was determined by the recovery of the European economy and the growth in demand for Swiss products. In particular, the prices of precious metals, such as gold and silver, increased by 5% in a few months, attracted by the stability of the Swiss franc.

The Swiss franc lost ground against the euro and the US dollar, while the Swiss National Bank confirmed the lead rate at 0% at its meeting on 18 June. This means that the Central Bank has no intention of raising interest rates, at least for the time being.

According to analysts, the increase in the Eur/Chf exchange rate could have a positive impact on the Ticino economy, particularly for traders and entrepreneurs operating in the tourism sector. For example, the number of foreign tourists visiting the Gotthard region could increase by 10% by the summer, thanks to the increased competitiveness of Swiss prices.

However, it is important to note that the increase in the Eur/Chf exchange rate could also have negative effects on the Ticino economy, particularly for workers and entrepreneurs who depend on the manufacturing sector. For example, the price of coal and

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Key points

• The Swiss franc has lost ground against the euro and the US dollar. - The Swiss National Bank confirmed the 0% lead rate at its meeting on 18 June. - The ECB raised the three benchmark rates by 25 basis points, bringing the deposit rate to 2.25%.

The Eur/Chf exchange rate has gained more than 2% since the end of May, rising above 0.93 francs for the first time since January. The Swiss franc lost ground against the euro and the US dollar, while the Swiss National Bank confirmed the lead rate at 0% at its meeting on 18 June.

The question is: are the upward pressures for the Swiss franc returning? According to experts, the exchange rate could continue to rise, bringing the franc to almost 0.95 francs by the end of the year. However, there are also alternative scenarios, such as a devaluation of the Swiss franc due to the global recession.

To better understand the situation, it is important to analyze historical data. Since 2015, the Swiss franc has gained about 20% against the euro, while the US dollar has lost about 10%. This means that the Swiss franc has become stronger against the US dollar, but less strong against the euro.

In Ticino, currency exchanges can have a significant impact on exports and tourism. According to data from the Federal Statistical Office, in 2020 Ticino exports to Europe reached a value of about 12

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Source: tio.ch