Swiss Franc Suffers as SNB Lags Behind Hawkish Central Banks
The US Dollar (USD) has gained ground against the Swiss Franc (CHF) in recent days, with the USD/CHF pair trading between 0.8230 and 0.8250 on Friday.
This comes after the Federal Reserve (Fed) raised interest rates by 25 basis points to a range of 3.75%-4% on Wednesday, with Chairman Kevin Warsh delivering an unexpectedly hawkish message that boosted expectations of further rate hikes, likely in December.
The Bank of Japan (BoJ) followed suit, raising its benchmark interest rate to the highest level in 31 years and hinting at further interest rate hikes in coming months.
The Swiss National Bank (SNB), on the other hand, is expected to maintain its benchmark interest rate at 0% for the foreseeable future, making the CHF an attractive funding currency for carry trade.
According to the UOB Group, momentum remains strong, but it's too early to tell if it will be enough for USD to break above 0.8300.