Keystone
The U.S. dollar continued to gain ground overnight into Friday, climbing to its highest level this year against the Swiss franc. Experts attribute the currency’s current strength to various factors.
The U.S. dollar is currently trading at 0.8086 Swiss francs—about one cent more than at this time on Thursday. The US currency had reached an annual high of 0.8093 earlier in the morning. The dollar has also gained ground against the euro. The euro/dollar pair stood at 1.1424 early Friday morning, down from 1.1459 the previous evening.
Experts at Commerzbank attribute the dollar’s current strength, among other things, to its decoupling from the price of oil. Most recently, the “greenback” had appreciated in tandem with rising oil prices, as oil is typically traded in U.S. dollars worldwide. However, following the peace agreement between the U.S. and Iran, oil prices have fallen significantly, while the dollar has remained largely stable and has even appreciated recently.
Wednesday’s meeting with the new Fed Chair, Kevin Warsh, has also somewhat heightened expectations of interest rate hikes in the U.S., as Landesbank Hessen-Thüringen notes. As a result, the yield advantage over the eurozone has widened, which is weakening the euro against the dollar.
Meanwhile, the Swiss franc has also weakened slightly against the euro. The euro/franc pair currently stands at 0.9238 after trading just above the 92-rappen mark on Thursday morning. With its accompanying comments regarding an increased willingness to intervene in the foreign exchange market if necessary, the Swiss National Bank (SNB) allowed the franc to depreciate slightly on Thursday.
