Swiss Franc Plunges to Two-Week Low Amid Inflation Fears and Rate Hike Expectations

The Swiss franc is trading near a two-week low of $0.81, its lowest level since August 19th, due to growing inflation concerns that are raising expectations for an earlier hike by the Swiss National Bank (SNB).

Swiss inflation doubled in August, while quarterly economic growth accelerated to its highest level in nearly five years.

This has led to a hawkish sentiment in markets, reducing the franc's appeal as a funding currency for carry trades. The SNB's policy rate is currently at 0%, and according to a survey by the Swiss Bankers Association, all bankers expect it to remain unchanged by year-end.