The franc further weakens against the euro

Trends in the foreign exchange market during this first month of the year are confirmed
© CdT/Archivio
Dina Aletras
13.01.2023 06:00

Confirmation is being given to the weakening phase of the franc against the euro, a trend that is characterizing the foreign exchange market in this first month of the year: this morning, the rate of the European currency touched 1.01 francs (1.0097), hitting a seven-month high.

To regain such a high level one has to go back to June 2022, in fact. The parity between the both currencies was reached on Wednesday. The franc is also losing ground against the dollar, which is trading at 0.93 today.

Underpinning the U.S. and eurozone currencies is the less gloomy economic outlook than feared. As uncertainty wanes, the franc's function as a safe haven asset is also tending to diminish.

In addition, as is also known, the Swiss National Bank (SNB), in contrast to what it has done in the past, has been tolerating the revaluation of the franc in the past few months, using the currency's strength to combat inflation imports, especially in the energy sector.

At the beginning of 2023, the euro rate was at around 0.99 francs. The high point reached in the currency's 20 year history (it has been in actual monetary circulation since 2002) was 1.71 francs, in November 2007, while the low of 0.94 francs was recorded in September 2022.