Swiss Franc Strengthens As SNB Rate Cut Hopes Fade

The Swiss franc appreciated against its major counterparts in the New York session on Tuesday, as Switzerland's consumer prices posted a steady increase in May.

The consumer price index grew 1.4 percent on yearly basis, the same rate as seen in April.

On a monthly basis, consumer prices advanced 0.3 percent due to several factors including rising prices for housing rentals and for international package holidays.

Core consumer prices gained 0.2 percent on month, taking the annual inflation to 1.2 percent in May.

The data reduced the probability of a rate cut when the Swiss National Bank meets this month.

The franc firmed to a 1-1/2-month high of 0.9674 against the euro, 2-1/2-month high of 0.8890 against the greenback and a 3-week high of 1.1368 against the pound, from its early lows of 0.9781, 0.8972 and 1.1483, respectively. The franc is poised to challenge resistance around 0.95 against the euro, 0.87 against the greenback and 1.11 against the pound.

The franc recovered to 174.11 against the yen, from an early 5-day low of 173.21. This may be compared to a previous fresh 5-week high of 174.75. Next key resistance for the currency is seen around the 175.00 level.