The Franc should remain under downward pressure against the Euro – Commerzbank
|The Swiss National Bank (SNB) delivered a 25 basis points rate cut to 1.50%, which triggered a sharp sell-off in CHF. Economists at Commerzbank analyze Franc’s outlook.
The SNB kicks off
The SNB surprised the majority of market participants by being the first of the G10 central banks to cut its key interest rate by 25 bps to 1.50%, which immediately sent the Franc plummeting.
In principle, the SNB has less leeway than other central banks to lower the key interest rate, as it has not raised it that sharply. In this respect, if it turns out that the ECB makes several interest rate cuts, but the SNB has possibly already done enough with this first step to guarantee price stability, the franc could even appreciate.
But let's wait and see; if inflation continues to fall, the SNB may well continue and cut rates further. For the time being, the SNB's action on Thursday suggests that the Franc should remain under downward pressure against the Euro.
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.