- Swiss National Bank
The Swiss Franc lost vis-à-vis its major counterparts after the official data from the Federal Statistical Office showed the Swiss producer and import prices fell for the eleven straight month in August. Switzerland's producer and import prices declined at a 1.2% pace year-on-year after dropping as much as 0.8% in the previous month. On a monthly basis, producer and import prices inched lower 0.2% after staying flat in July. Producer prices declined 0.9% and import prices by 1.9% in August from last year. Compared to July, producer prices and import prices slid 0.2% each. Traders await the Swiss National Bank's announcement on monetary policy on September 18. The central bank is widely expected to leave its three-month Libor on hold at 0.0-0.25% and the currency ceiling at CHF 1.2 per Euro, ready to take further steps to cap the Franc if necessary including imposing negative interest rates.
The Zurich-based central bank set a ceiling of 1.20 per Euro on the Swiss Franc three years ago to avert deflation and a recession. That limit remains crucial as a strengthening of the Franc would increase the risk of negative price growth. Coupled with the conflicts in Ukraine and the Middle East, rhetoric by European Central Bank President Mario Draghi has been keeping the Franc at the elevated levels.
© Dukascopy Bank SA