The SNB’s upward revisions to its inflation forecasts in December may have been more bullish that the market had expected, but the central bank is showing no signs of moving away from its ultraaccommodative policy stance, explains Jane Foley, Senior FX Strategist at Rabobank.
“Policy makers may be celebrating this year’s EUR revival, which has finally relieved some pressure on the overvalued CHF. However, it is far too soon to expect the SNB to risk breaking the upward trend in EUR/CHF by sounding less dovish.”
“The Norges Bank, however, is more concerned about the downside pressure on its currency. Steady rates were confirmed in December but policymakers signalled an earlier exit from their extremely accommodative policy stance. The announcement provided some support for the NOK, but scope for a strong recovery in the value of the NOK vs. the EUR will likely be lessened by the buoyancy of the EUR.”
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