The Swiss Consumer Price Index data was released this morning by the Swiss Federal Statistics Office. On a month-to-month basis, consumer prices remained unchanged in May as expected at 0.0 percent, indicating a drop from the previous month’s 0.1 percent rise.
Meanwhile, the index showed consumer prices rose 0.4 percent from a year ago in May 2011 again in line with predictions.
Prior to the data release, the Dollar was sliding against the Swiss Franc, pressured by concerns of a slowing economy and the unlikelihood that US interest rates will rise. The Franc was seen as a safe haven investment during these uncertain times.
The weak Swiss inflation data will now mostly persuade the Swiss National Bank to delay raising the target for its benchmark interest rate. The markets will now focus on the next SNB policy review which will be held on June 16.
Falling oil prices and a strong Franc may have contributed to dampening inflation in Switzerland.
Upon release of the data at 07:15GMT, the Swiss Franc became extremely volatile. USDCHF spiked up from 0.8343 to 0.8348 then spiked down immediately to 0.8336. Likewise, EURCHF was volatile, spiking up from 1.2214 to 1.2227 then down to 1.2204 within seconds.