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Anyone planning a vacation in the US should be happy: Swiss francs are currently selling for more US dollars than they have in a long time. On Thursday, the US currency fell to 85.95 cents per dollar. At the end of the day, the last time the exchange rate was this low was in January 2015.
The dollar/franc rate fell 14 percent compared to the short-term rise last fall. It has lost 7.15% since the beginning of the year. This means that the appreciation of the Swiss franc is higher than inflation in the US. Overnight stays and restaurant visits are getting cheaper in the US for Swiss people.
Even at the dollar 60 or 70 centimetres?
But that shouldn’t be the end of the road: UBS economists expect the dollar to stay at 85 cents at the end of the year and 83 cents in the summer of 2024. Valiant Bank experts can even imagine a 70 centimeter dollar/franc exchange rate in the medium term.
UBS economists assume that the franc will appreciate 2 percent a year against the dollar. Explanation: Significantly higher inflation in the US compared to Switzerland. Therefore, they expect a dollar to still cost 66 cents in 2030. If central banks don’t get inflation under control, the dollar may even rise to 60 cents by then.
Is it just a short break down for the euro?
Paradoxically, the successful fight against inflation in the US is now the cause of the current dollar plunge. Inflation in the US fell more than expected to 3 percent in June, according to figures on Wednesday. Bond yields fell nearly 20 basis points in two days. This makes bonds from the Eurozone, for example, more attractive.
The euro has already lost more than three percent against the franc this year. It’s around 96 inches now. This makes shopping, dining and going out in the eurozone a little more fun during the summer holidays. UBS experts expect the rate to be 97 centimeters by the end of the year and 98 centimeters by June next year.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
