Swiss franc falls despite SNB Jordan’s hawkish message

• SNB’s Jordan says cannot exclude further hikes
• US PPI dips, unemployment claims jump

The Swiss franc has fallen considerably on Thursday. In the North American session, USD/CHF is trading at 0.8950, up 0.59% on the day.

SNB head Jordan says more tightening possible

Swiss National Bank President Jordan reiterated a hawkish message on Wednesday that he sent out a week ago. Jordan said that he could not rule out further rate hikes, noting that current monetary policy was not restrictive enough. In other words, the SNB is unhappy with inflation levels, which although relatively low at 2.6%, have been above the Bank’s target of 0-2% since February 2022. Inflation fell from 2.9% to 2.6% in April, and there is one final inflation report before the SNB’s next meeting on June 22^nd. The SNB has not shied away from being aggressive and delivering oversize hikes as high as 0.75% in the current rate-hike cycle, and we could see another hike if inflation doesn’t fall close to 2.0% in the next release.

The Swiss franc continues to appreciate, much to the consternation of SNB policymakers, as a stronger Swissy makes exports more expensive. The Swiss franc has soared about 500 points since March 1^st and Jordan made sure to remind his listeners that the central bank was prepared to intervene in the forex markets if necessary.

In the US, unemployment claims surprised to the upside, rising to 264,000, up from 245,000 and higher than the consensus estimate of 242,000. This was the highest total since January 2022, and although it’s just one report, it will likely raise speculation that the labour market is showing cracks. On the inflation front, the Producers Price Index, taking the lead from CPI, softened in April. The headline reading fell from 2.7% to 2.3% (2.4% est). The core rate dropped from 3.4% to 3.2% (3.3% est).

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USD/CHF Technical

• USD/CHF has pushed past resistance at 0.8907.  The next resistance line is 0.8994
• 0.8819 and 0.8732 are providing support

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