SNB leaves policy rate unchanged at 1.75% vs 2.00% expected

  • Prior 1.75%
  • Significant tightening of policy in recent quarters is countering remaining inflationary pressure
  • It cannot be ruled out that further tightening may become necessary
  • SNB will monitor inflation developments closely in the coming months
  • Will remain active in the foreign exchange market as necessary
  • Sees 2023 inflation at 2.2% (unchanged)
  • Sees 2024 inflation at 2.2% (unchanged)
  • Sees 2025 inflation at 1.9%
  • Full statement

It was supposed to be a one and done case for the SNB but as the Fed and ECB had already chosen to pause, the Swiss central bank is of the view that they can afford to take a step back further since inflation isn’t as rampant there as opposed to elsewhere I guess.

The surprise move is weighing on the Swiss franc, with USD/CHF rising to 0.9050 from around 0.8990 before the decision. The pair is not only clearing the 0.9000 mark at the moment but also the 200-day moving average at 0.9033. That sets up a more bullish outlook with the June highs near 0.9100 in focus next.

This article was written by Justin Low at Source