Dollar Rises, Pound, Swiss Franc Drop On Busy Central Bank Day

  • Posted on June 20, 2024
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By Harry RobertsonLONDON (Reuters) - The dollar climbed on Thursday, while the Swiss franc and the pound dropped as a busy day of central bank meetings kept currency traders alert.The dollar index, which tracks the currency against six peers, was last up 0.2% at 105.42 after a volatile 10 days that has seen mixed signals from the U.S. economy and European markets rocked by French political uncertainty.Helping the U.S. currency climb was a drop in the pound after the Bank of England policy announcement, and the Swiss franc after the Swiss National Bank lowered interest rates to 1.25%, following a cut in March.Sterling slipped 0.2% to $1.2691 after the BoE voted 7-2 to keep its main interest rate unchanged, but some policymakers said their decision not to cut was "finely balanced"."The pound is trading lower on the 'finely balanced' comment," said Neil Jones, senior FX sales to financial institutions at TJM Europe."This is clearly a dovish hold. The narrative from Bailey suggests for some, they are close to cutting."The dollar, meanwhile, climbed 0.6% to 0.8894 francs as the Swiss currency fell from around a three-month high in the wake of the rate cut, which came with forecasts predicting a further fall in inflation to 1.1% in 2025."Given the appreciation of the franc in the context of the French political turbulence, we had expected a dovish message, but not a cut," said Christian Schulz, deputy chief European economist at Citi."This cut could be premature if French politics stabilise and weakens the franc," he said. The franc is seen as a safe haven and had risen over the last week.

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