Swiss franc pressured by Thomas Gordon's remarks

Swiss franc dipped a bit on Thursday against a basket of major rivals, extending losses for the sixth straight session against the dollar, and hovering near a four-week trough after Swiss National Bank Governor Thomas Gordon's remarks on rethinking forex policies.

Hopes for a reduced interest rate gap between Switzerland and the US faded as the odds of early US interest rate cuts this year subside. 

USD/CHF 

USD/CHF rose 0.1% to 0.8651, with a session-low at 0.8633, after closing down 0.3% on Wednesday, the fifth loss in a row, plumbing a four-week trough at 0.8685. 

Thomas Gordon 

SNB Governor Thomas Gordon said the franc has experienced a nominal increase in value, which was beneficial in protecting against inflation. 

Gordon added that in the last two weeks, the real value of the currency increased, making conditions for local companies more difficult. 

He said the SNB will take the currency's recent strength in consideration starting at the March 21 meeting. 

Interest Rate Gap

The current interest rate gap between the US and Switzerland stood at 375 basis points in favor of the US, and markets hoped for a reduction to 350 points next March when the Fed is supposed to start cutting rates, however, the odds of such a move declined. 

Estimates 

Analysts said there's a chance the SNB might cut its inflation forecasts in March due to the recent spike in franc's value. 

The SNB could then focus on interest rate cuts, with the first interest rate cut expected to occur in June.