Swiss Franc too expensive, says SNB’s Jordan

In an interview with Bloomberg in February, the president of the Swiss National Bank, Thomas Jordan, said the Swiss Franc had been rising in nominal terms for several years, and that this had been “helpful”, as it has “shielded us from inflationary pressures from abroad.” Jordan added, however, that at the end of 2023 the Franc had started to rise in real terms, and that this was now a problem for Swiss businesses, many of whom are exporters.

His comments suggest the SNB is unlikely to introduce policy changes that will further appreciate the Swiss Franc, chief amongst them the elevation of interest rates. 

On the Horizon

The next key event for the USD/CHF is likely to be one that moves the US Dollar. The testimony of Federal Reserve chairman Jerome Powell before the US Congress on Wednesday at 15:00 GMT could impact USD. 

The Federal Reserve is currently expected to cut interest rates sometime in the summer, possibly in June. A run of poor macroeconomic data over the past few days increases that possibility. Traders will be watching the Fed Chair’s speech, therefore, for any hints the Fed is more closely aligning to a definite time line for lowering interest rates or even a set date.

If Powell intimates cuts are coming – either sooner than foreseen or in June – this could have a dramatic impact on the US Dollar, weakening it against most counterparts.