Forexpros - The U.S. dollar was sharply higher against the Swiss franc on Monday, climbing to a two-week high as speculation the Swiss National Bank would set an exchange rate to weaken the franc weighed heavily.
USD/CHF hit 0.7996 during European morning trade, the highest since July 29; the pair subsequently consolidated at 0.7921, surging 1.83%.
The pair was likely to find support at 0.7547, last Friday's low and short-term resistance at 0.8046, the high of July 28.
Swiss newspaper SonntagsZeitung reported on Sunday that the Swiss National Bank and the Swiss government were in "intense talks" over a possible exchange rate target level to curb strong gains in the currency.
Speculation that the central bank would peg the franc to the euro gained ground after the newspaper reported that plans are "ready," and the SNB may set such a target in "coming days".
According to the newspaper, lobby group Economiesuisse was pushing for a target in the range of 1.1000-1.1500, while the Swiss Federation of Trade Unions backed a target near the 1.4000-level.
The article notes that the SNB may initially set a target level that is slightly above 1.1000 francs per euro.
SNB spokesman Walter Meier declined to comment on the issue.
Meanwhile, official data released earlier showed that Swiss producer prices dipped by a seasonally adjusted 0.7% in July, after declining by 0.5% in June.
Analysts had expected Swiss PPI to ease by 0.6% in July.
Year-over-year, the producer price index fell at an annualized rate of 0.6% in July, broadly in line with market expectations, following a 0.4% decline in the previous month.
The Swissie was also down against the euro, with EUR/CHF jumping 1.77% to hit 1.1284.
Later in the day, the U.S. was to produce official data on manufacturing activity in New York State and a report on the balance of domestic and foreign investment in the U.S.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
