- Economic slowdown in Switzerland cannot be ruled out.
- Trade policy situation is creating high uncertainty for all countries, including Switzerland.
- Price stability cannot prevent trade policy related uncertainty, but still very important.
- Trade policy could fragment global economy.
- Main instrument is interest rate, but we can also use forex interventions to influence monetary conditions.
The central bank is certainly not happy with the Swiss Franc strength. This is a greenlight for more CHF weakness barring risk-off flows.
This article was written by Giuseppe Dellamotta at www.forexlive.com.