Dollar and Swiss franc, robust negative correlation between FED choices and uncertainty
Last Update: 25/12/2024
The U.S. dollar (USD) and the Swiss franc (CHF) have a generally negative correlation, influenced by differences in monetary policies and the franc’s role as a safe haven currency.
In general, the USD/CHF correlation intensifies negatively in periods of global uncertainty, while in more stable economic environments it may tend toward greater neutrality or weak correlation.
As can be seen from the chart above, the correlation (calculated using two proxy ETFs) remains largely in negative territory, below the 10-year average and at values around the 5-year average. Currently, the indicator signals a rather strong negative correlation that is partly affected by U.S. monetary policy decisions, but is also an effect of the uncertainty enveloping international markets as they await the outcome of the U.S. elections.
Comparing the two currencies shows the strength of the dollar in recent weeks, a strengthening that penalizes the Swiss franc.
