The Swiss franc rose against its major counterparts on Monday, supported by speculations over the interest rate hike by the Swiss National Bank (SNB).
USD/CHF hit a fresh record low of 0.8775 during European trading, from last week’s close of 0.8863.
The greenback continued its losses against the franc posting a straight third weekly loss on Friday. USD/CHF is on the downward trend likely to loose 400 pips in April, its worst monthly decline since December last year.
The greenback was pressurized as traders remain cautious over the news conference by Chairman Ben Bernanke on Wednesday to see how the Federal Reserve plans to seek an exit from its easy monetary policy.
“We expect the FOMC's April statement to look similar to the March one. On inflation, the Fed is likely to reassert its view that the recent acceleration in headline inflation will eventually prove transitory,” said a note from RBC Capital Markets on Monday.
The Swissie found support from the speculations over interest rate hike by the Swiss National Bank (SNB) in the coming months, after the central bank revised the growth forecast upwardly for the year earlier this month.
The Swissie was higher against the Japanese yen, with CHF/JPY touching a 10-day high of 93.44 against the Friday’s close of 92.41. The next upside target level for the pair is seen at 94.0.
Earlier on Monday, a report from the Bank of Japan (BoJ) said that index showing the prices for corporate services in the country fell 1.2 percent to 96.6 in March, following a 1.1 percent decline in the previous month. The index has been on a continuous decline since October 2008, indicating continued deflation in the economy.
The yen was also pressurized by the concerns over the BoJ lagging behind other central banks in raising interest rates.
“The Bank of Japan is poised to slash its 2011 growth forecast to 0.8 percent from 1.6 percent, according to Japanese media reports indicated, supporting expectations of super-loose monetary policy settings being maintained for some time to come,” said a note from TD Securities.
The single currency was lower against the Swiss franc, with EUR/CHF breaking below 1.2870 to hit 1.2820. The pair closed at 1.2898 on Friday. The Swissie also traded higher against the British pound, with GBP/JPY hitting a 1-month low of 1.4505.
Elsewhere, the Australian dollar rose to a fresh 29-year high against the US dollar on Monday, supported by continued rise in prices of gold and commodities.
AUD/USD hit a new high of 1.0777 during Asian trading, later trimming the gains to trade at 1.0735.
Gold prices hit another all-time high on Monday, supported by growing tensions in the Middle East and North African (MENA) region and a weak dollar. Spot gold prices hit a high of $1513.70 an ounce during mid-day trading in Singapore, before trading back to $1512.27.
Besides, silver prices rose to a 31-year high, with US silver futures hitting $47.87 an ounce.