Despite a recent rally for currencies, the change left the Swiss Franc in a poor position. The USD CHF exchange rate has had a continuous streak of losses, its worst since 1975. The dollar has been experiencing a great rally due to the effects of low consumer confidence. New house sales have dropped considerably. However, some reports point to record high prices for homes, making for contradictory reports.
There have been worries around the economy, understandably. The US Fed’s decisions could have a large effect, and they should be careful about any more rate hikes. However, due to worries about another rate hike and the use of the dollar as a safe haven, traders have boosted the currency considerably. The CEO of JPMorgan has warned that another hike is likely coming and worries about whether the economy is ready for it. This all has been having an effect on the CHF USD relationship.
Economic Uncertainty, Inflation Concerns, and Exchange Rate Trends
If the economic forecast keeps looking poor, a hike becomes less and less likely. However, inflation is probably going to keep persisting, and from this point of view, the hikes may still happen. Among worries about rising prices for houses, oil, and similar goods, more inflation seems possible. However, no one is certain as to when the peak of this inflation will be.
Coming back to consumer confidence data, it does not bode well for the economy. Every day consumers feel great insecurity with all these rising prices. This will likely cut down on spending, leading to a worse-performing economy. Credit conditions will likely suffer, leading to even less spending and job losses. Originally, analysts expected a level at 83.30, which then plummeted down to 73.70.
The USD CHF exchange rate has been rising considerably, hurting the Swiss Franc. So, 1 USD to CHF is now at almost 0.92. If things keep going this way, we may see an upper limit of 0.935. It remains to be seen if this bullish trend persists.