The Swiss franc was the strongest currency on the Forex market today, rising against all other most-traded rivals. That was a very puzzling performance, considering that news neither from Switzerland nor from abroad was positive for the currency.
Switzerland Federal Statistical Office reported that the consumer price index fell by 0.2% in November compared with the previous month after showing no change in October. Market participants were ready for a decline but they have been expecting a smaller fall of 0.1%. Compared with the same month of the previous year, inflation was at -0.7%. The report explained what factors contributed to the decline:
The 0.2% decrease compared with the previous month can be explained by several factors including falling prices for international package holidays. Hotel accommodation also recorded a price decrease, as did fruiting vegetables. In contrast, prices for housing rentals and foreign red wine increased.
The market sentiment was overall optimistic as macroeconomic indicators from countries all around the world were positive for the most part, suggesting that the global economy weathers the second wave of the COVID-19 pandemic much better than was expected. And hopes for coronavirus vaccines being available soon added to the optimism. In fact, news broke out today that the vaccine from Pfizer and BioNTech will be available in the United Kingdom as soon as the next week. Being considered a safe-haven currency, the franc usually performs poorly in a risk-on environment. But for some reason that was not the case today, and the Swissie beat all of its major rivals.
USD/CHF rallied from 0.8993 to 0.9013, fell back to 0.8983, but was trading at about the opening level as of 12:32 GMT today. EUR/CHF declined from 1.0855 to 1.0833. CHF/JPY rallied from 115.91 to 116.46.
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