Investing.com – The U.S. dollar rallied against the Swiss franc on Monday, surging to a more than two-week high after weak Swiss inflation data added to speculation over a fresh intervention to weaken the franc.
USD/CHF hit 0.9031 during European morning trade, the pair’s highest since October 20; the pair subsequently consolidated at 0.9006, jumping 1.83%.
The pair was likely to find support at 0.8768, Friday’s low and resistance at 0.9110, the high of October 12.
Official data showed that Swiss consumer price inflation declined unexpectedly in October, falling 0.1% after rising by 0.3% in September. Analysts had expected CPI to increase by 0.2% last month.
Year-on-year, Swiss consumer prices dipped 0.1% in October, after increasing by 0.5% the previous month. Analysts had expected CPI to rise at an annualized rate of 0.2% in October.
The weak data added to fears that the Swiss National Bank would raise its floor under the euro's value against the franc to weaken the currency.
The data came after SNB Chairman Phillip Hildebrand indicated Sunday that the Swiss franc was still highly valued against the euro and said the central bank was ready to take further measures to weaken the currency if necessary.
“We are ready to take further measures in case economic prospects and a deflationary development should require it,” he said.
The Swissie was also sharply lower against the euro, with EUR/CHF advancing 1.28% to hit 1.2355.
Also Monday, the yield on Italian 10-year government bonds soared to a euro-lifetime high, amid open dissent within Prime Minister Silvio Berlusconi's government ahead of a parliamentary vote on public finances on Tuesday.
USD/CHF hit 0.9031 during European morning trade, the pair’s highest since October 20; the pair subsequently consolidated at 0.9006, jumping 1.83%.
The pair was likely to find support at 0.8768, Friday’s low and resistance at 0.9110, the high of October 12.
Official data showed that Swiss consumer price inflation declined unexpectedly in October, falling 0.1% after rising by 0.3% in September. Analysts had expected CPI to increase by 0.2% last month.
Year-on-year, Swiss consumer prices dipped 0.1% in October, after increasing by 0.5% the previous month. Analysts had expected CPI to rise at an annualized rate of 0.2% in October.
The weak data added to fears that the Swiss National Bank would raise its floor under the euro's value against the franc to weaken the currency.
The data came after SNB Chairman Phillip Hildebrand indicated Sunday that the Swiss franc was still highly valued against the euro and said the central bank was ready to take further measures to weaken the currency if necessary.
“We are ready to take further measures in case economic prospects and a deflationary development should require it,” he said.
The Swissie was also sharply lower against the euro, with EUR/CHF advancing 1.28% to hit 1.2355.
Also Monday, the yield on Italian 10-year government bonds soared to a euro-lifetime high, amid open dissent within Prime Minister Silvio Berlusconi's government ahead of a parliamentary vote on public finances on Tuesday.