Swiss Franc (FXF) At Historic Highs Against Dollar (UUP)

The Swiss Franc (CHF) continued to rally against the struggling US Dollar (

) and bulk of other major currencies today as investors continue to price in a rate hike by the Swiss National Bank later this year, while very little change, if any, is expected in the direction of the Fed. The rally has pushed the Swiss currency to another all time high against its US counterpart, while moving significantly higher against the Euro (EUR), British Pound (GBP) and the Japanese Yen (

). The reason for the optimism over a rate hike is the continuing real strength of the Swiss economy, as the housing prices and consumer spending rise steadily while unemployment remains at low levels. And while the SNB realizes that already strong Swiss currency has hurt domestic exporters to some extent, the recent rate hike by the European Central Bank gives the Swiss monetary authorities room to raise rates without causing strong jump in the Franc. This especially might be true if the ECB keeps its policy according to forecasts, which expect a series of rate hikes in near term as well. As a result of the rally, the USD/CHF reached to yet another all time high at 0.8744, although the pair recovered a little during the last couple of hours and currently is trading at 0.8770s. The EUR/CHF currency pair fell from 1.2864 to 1.2798 and the GBP/CHF dropped from 1.4566 to 1.4430. The CHF/JPY, meanwhile, soared from 92.30s all the way to 93.50.