The U.S. dollar on Monday rose to its highest level in over two weeks versus the Swiss franc amid speculation the Swiss National Bank may intervene to devalue to franc, though it dropped versus the yen and the euro due to weak U.S. economic report.
The greenback was last trading 0.87 percent up versus the franc at 0.9253 franc, having dropped from a session peak of 0.9347 franc. The euro last traded 0.62 percent higher versus the dollar at $1.13515. The dollar fell 0.24 percent versus the yen to 117.22 yen, but traded higher than a two-week trough of 116.64 yen touched earlier today. The dollar index, which tracks the dollar versus a pool of six major peers, fell 0.37 percent to steady at 94.452.
Analysts speculated the SNB may be actively intervening with a cap on the franc after Monday data indicated that bank deposits with the Swiss central bank grew in the week through Jan. 30. The SNB last intervened in Jan. 15 by doing away with its lid of 1.20 francs per euro, roiling financial markets as both the dollar and the euro spiraled downwards against the currency.
“The SNB in general feels like the Swiss strength is extremely overdone, and based upon that view, it looks like they’re trying to move the market to a level they believe is more correct,” Douglas Borthwick, a New York-based managing director at Chapdelaine Foreign Exchange, told Reuters.
The dollar lost against the yen and the euro after a report indicated that U.S. factory activity in January and construction and consumer spending in December lagged expectations. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Jonathan Millet at firstname.lastname@example.org