Swiss Franc dips to fresh four-month lows as SNB leaves interest rates at 0%

The Swiss Franc (CHF) experienced a decline to its lowest levels in four months on Thursday, following the Swiss National Bank's (SNB) decision to maintain interest rates at 0%. The USD/CHF exchange rate reached 0.8269, marking its highest point since late May, after briefly touching 0.8530 earlier in the session. The SNB's decision to keep rates unchanged, despite inflation accelerating due to rising oil prices, has raised concerns about the US economy overheating and the likelihood of further interest rate hikes by the Federal Reserve (Fed).

The SNB's president, Martin Schlegel, also noted that a low interest rate makes the Franc attractive for carry trades. The US economy showed strong growth in the second quarter, while the US Dollar is expected to continue its uptrend due to hawkish Fed expectations.