The Swiss franc was stable against the dollar and the euro on Tuesday as traders were poised ahead of a Federal Reserve meeting later in the session where US interest rates are expected to rise. The dollar changed hands at 1.1782/88 Swiss francs in early European trading on Tuesday, from levels of 1.1772/74 late on Monday. The euro traded at 1.5509/14 francs, down a touch from 1.5519/24 on Monday. The Fed policy makers are widely expected to raise the federal funds rate by 25 basis points to 2.75 percent, which would be the seventh straight rate increase since June 2004.
Given concerns about rising inflation, especially with oil prices climbing to fresh record highs last week, some traders expect the Fed to indicate in its post-discussion report that it will shift to an accelerated path of tightening.
Higher US interest rates would draw more liquidity into dollar-denominated deposits and thereby strengthen the currency.
Switzerland's central bank left its interest rate target on hold at 0.75 percent last Thursday, amid disappointing economic growth and weakness in its key European trading partners.
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