USD/CHF Flat on Inflation, Investors Weigh SNB Comments

The Swiss franc is trading relatively flat against the US dollar to finish the trading week. The safe-haven asset, which has been one of the top-performing currencies in this year’s chaotic financial market, was struggling to find direction amid the latest producer and import prices and the central bank’s lack of enthusiasm over negative interest rates. Despite a bombardment of foreign exchange interventions, the franc continues to appreciate, frustrating policymakers.

According to the Swiss Federal Statistical Office (SFSO), producer and import prices edged up by 0.1% in September, up from the 0.4% drop in August. Year-over-year, they have slumped 3.1%, the smallest decline since March. Import prices fell 5.6%, while producer prices tumbled 1.9%.
It is going to be quiet on the data front over the next little while as the only information coming out next week will be trade numbers. Analysts anticipate that the trade surplus narrowed last month.
In an interview that surprised market observers, Swiss National Bank (SNB) Chairman Thomas Jordan revealed that the institution is “not big fans of negative interest rates,” noting that it is a “necessary” tool in this environment to support the economy and limit the franc’s acceleration.
Jordan recently told RTS that a weaker euro had been a problem for many years. He also noted that the US dollar has weakened in recent months, which has made the franc even more appealing in the broader financial market.
Overall, according to the head of the SNB, “Switzerland is getting through the crisis relatively well.”
This could turn out to be an important interview ahead of next month’s semi-annual report from the US Treasury Department regarding global currency manipulators. Experts think that it is inevitable that Switzerland will be added to a watchlist as opposed to being designated as a full-blown manipulator. The SNB has previously dismissed the assertions by explaining that its FX interventions are more monetary policy purposes rather than trying to give the country an unfair advantage in the international marketplace. Others think that Washington will refrain from pursuing this battle, citing the myriad of problems currently facing the administration.
The USD/CHF currency pair rose 0.008% to 0.9152, from an opening of 0.9146, at 18:44 GMT on Friday. The EUR/CHF advanced 0.21% to 1.0729, from an opening of 1.0705.
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