The Swiss franc weakened today after the report showed that the inflation in Switzerland unexpectedly declined, spurring the speculation that the central bank may tighten the peg of the Swiss currency to the euro.
The Federal Statistical Office reported that the Swiss Consumer Price Index fell by 0.1 percent in October, following the 0.3 percent growth in the preceding month. Analysts promised the index to increase by 0.2 percent. The members of the Swiss National Bank were already worried about the negative impact of the strong currency on the nationâs economy and the slowing inflation gives even more stimulus for an additional intervention. SNB President Philipp Hildebrand commented on the strength of the franc inn his interview to the NZZ am Sonntag newspaper:
It could lead to deflationary developments and weigh heavily on the economy. We are ready to take further measures in case economic prospects and a deflationary development should require it.
USD/CHF advanced from 0.8870 to 0.8960 and EUR/CHF rose from 1.2267 to 1.2335 today as of 11:12 GMT.
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