CHF softens after SNB holds rates – BBH
|The Swiss Franc (CHF) underperformed after the SNB kept its policy rate at 0%, but persistent safe-haven demand offsets concerns over a potential negative rate, while the central bank downgraded 2026 GDP growth due to elevated US tariffs, BBH FX analysts report.
GDP outlook downgraded amid US tariffs
"CHF underperformed after the Swiss National Bank (SNB) left the policy rate at 0%, as expected. The SNB signaled that the bar for negative rates is high but cannot be ruled out. In fact, SNB President Martin Schlegel reiterated that the bank is prepared to cut further if required."
"Otherwise, the SNB’s medium-term inflation forecast remains unchanged and within the range of price stability. The SNB downgraded its 2026 GDP growth projection to “just under 1%” from for 1% to 1.5% previously due to significantly higher US tariffs. Therefore, any settlement of the trade dispute with the US would lower the risk of the SNB resorting to a negative policy rate."
"The swaps market continues to imply nearly 50% odds of a 25bps SNB rate cut to a low of -0.25% in the next 12 months. Regardless, CHF safe haven status more than outweighs the drag to the currency from the likelihood of negative rates."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.