US dollar falls to its lowest level against the franc in 14 years
Keystone-SDA
The weakness of the dollar in recent weeks continues. The greenback hit new lows for the year against both the franc and the euro on Tuesday.
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Against the franc, the dollar is currently at its lowest level in 14 years. Against the euro, the US currency is at its weakest since 2021.
The dollar reached a daily low of CHF0.7872 around midday. The euro, on the other hand, rose to 1.1832. Meanwhile, the franc also strengthened somewhat against the euro. With a low of CHF0.9307, the euro is targeting the CHF0.93 mark.
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As Deka-Bank writes in a recent statement, this current dollar movement is mainly due to the interest rate differential between the US and the eurozone. On the other hand the greenback’s first bout of weakness at the beginning of April following US President Donald Trump’s “Liberation Day” was mainly driven by asset shifts out of the US.
Commerzbank adds that the euro has recently appreciated against the dollar for eight days in a row. The next three days will see a series of data on the US labour market. The highlight will be the government’s major labour market report on Thursday. According to Commerzbank, it is not entirely clear how the market will react to a strong labour market in particular.
A good labour market report would not necessarily be dollar-positive. “If the market continues to expect the Fed to cut interest rates despite a good labour market, this should weigh significantly on the dollar. The market would then start to price in a political Fed that will cut interest rates regardless of the data.”
Meanwhile, central bankers are meeting at the European Central Bank’s monetary policy forum in Sintra, Portugal. Fed Chairman Jerome Powell’s speech is eagerly awaited. Among other things, the monetary policy strategy will be a topic, but possibly also the political attempts to exert influence.
Translated from German by DeepL/ts
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