Swiss central bank dials down dollars

The Swiss National Bank may be a special case, but if you were looking for a switch in the behaviour of central bank reserve managers in their currency preference, then the Swiss case is a curious vignette. The dollar is off the menu.

- MIKE DOLAN

The SNB’s longstanding battle against the deflationary effects of a super-strong franc resumed in earnest this year as the US tariff-related shock in April sent the dollar plunging and investors in search of safe havens, such as gold and francs.

With Swiss inflation in negative territory for the first time in four years, the SNB once again floored its policy interest rate back to zero in June. And it intervened with gusto in the open market to weaken the franc as it soared early in the second quarter.