Stronger CPI Lifts Swiss Franc (FXF) Higher

As if it did not appreciate enough in recent months, the Swiss Franc (CHF) received a surprising boost during the European trading session after the consumer price index, the most important gauge of inflation, came out a lot higher than analysts expected. The Swiss currency has been on a rise for quite a wile now, first on the back of its strong economy, then as a safe haven alternative to the Dollar (USD) and Japanese Yen (JPY) during tough times. As a result, it has constantly reached fresh historic highs against several of its counterparts during the last year. March CPI number reignited strength in the Swiss currency, as it came in at 0.6% month over month and 1% year over year, significantly higher than the forecast of 0.2% and 0.5% respectively. Higher inflation means higher chance that the Swiss National Bank will have to raise the interest rates to maintain price stability, which in turn will mean more demand for the higher yielding currency. After the number was released, the CHF/JPY currency pair spiked to a 2.5 year high, moving from 91.90s all the way to 93.26, the highest level since October of 2008. The USD/CHF, meanwhile, first tumbled from 0.9260 to 0.9130, but later recovered part of its losses and is trading at 0.9180s on a very thin volume.