Swiss franc hits highest against euro since 2015

This is as Europe appears to be on the brink of a fourth Covid wave
Newsfeed19 Nov 2021
    Photo credit: AFP Photo

    The Swiss franc hit its strongest level against the euro in more than six years as a renewed surge of Covid infections in Europe buoyed demand for haven assets.

    The Swiss currency climbed as much as 0.1% on Thursday (18 November), briefly pushing it through the 1.05 psychological resistance level against the common currency. That move briefly put the pair at its lowest since July 2015, before reversing course and heading higher.

    Traders have piled into the haven currency as Europe appears to be on the brink of a fourth wave of Covid infections. Germany, the region’s largest economy, reported record new infections per 100,000 inhabitants this week (ending 19 November). Austria, meanwhile, enforced a lockdown for people who have not been vaccinated, part of a series of stricter curbs in Europe to get the pandemic under control.

    Another move through 1.05 per euro could provoke an intervention response from the Swiss National Bank (SNB), whose policy it is to buy foreign exchange as needed to ensure monetary conditions remain adequate. Any activity probably would not show up in the sight deposit statistics until the week after next, however.

    Because of a strong currency, Switzerland has been spared the spike in inflation seen across other advanced economies. The average rise in prices is due to remain within what the SNB’s 2% parameter for price stability this year.  – Bloomberg News.

    On Thursday, the US Dollar Index slipped 0.30% to 95.544, the euro climbed 0.46% to USD1.1371, and the pound rose 0.05% to USD1.3494, and the yen finished 0.16% weaker at 114.26 per dollar.

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