The Swiss franc is experiencing a decline on Thursday, with USD/CHF trading at 0.9050, showing a 0.24% increase. This year has been turbulent for the Swiss franc, as it has dropped by 7.7% against the US dollar and is currently at its lowest level since November.
Switzerland has managed to maintain a low inflation rate, with the latest data showing a 1% increase year-on-year in March, down from 1.2% and below the market expectation of 1.3%. This marks the lowest level since September 2021.
The Swiss National Bank has been successful in keeping inflation within its target range of 0-2% for ten consecutive months. However, the recent decrease in inflation has raised concerns about the possibility of deflation. In response, the SNB reduced rates by a quarter-point in March, bringing the key rate to 1.5%. Expectations are now high for another cut at the upcoming June meeting.
Meanwhile, in the US, unemployment claims exceeded expectations at 221,000 last week, with the nonfarm payrolls report due to be released on Friday. The market estimate for March is 200,000, down from 275,000 the previous month.
On the technical side, USD/CHF tested resistance at 0.9074 and has support levels at 0.9050 and 0.9005.
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