SNB steers rates on a steady course, USD/CHF renews 3-month lows


  • SNB maintains the no-rate change policy in December.
  • USD/CHF remains in the red at three-month lows.

At its December quarter monetary policy assessment held this Thursday, the Swiss National Bank (SNB) board members decided to leave the monetary policy settings unchanged.

The SNB left the benchmark sight deposit rate unchanged at -0.75%.

The central bank maintained the 3-Month Libor Target Range steady between -1.25% to -0.25%, as widely expected.

In reaction to the SNB’s status-quo, the Swiss franc ticked a few pips higher, with USD/CHF renewing three-month lows at 0.9813.

Summary of the statement

Trade-weighted exchange rate of the Swiss franc is practically unchanged compared with September 2019.

The franc thus remains highly valued, and the situation on the foreign exchange market is still fragile.

Will remain active in foreign exchange market as necessary.

Remains willing to intervene in the foreign exchange market as necessary, while taking the overall currency situation into consideration.

Negative interest and the willingness to intervene counteract the attractiveness of swiss franc investments and thus ease the upward pressure on the currency.

Expansionary monetary policy continues to be necessary given the inflation outlook in Switzerland.

International trade tensions and political uncertainty have weighed on the global economy in recent months.

The longer-term forecast is virtually unchanged. For 2019 the forecast stands at0.4%, for 2020 at 0.1% and for 2021 at 0.5%.

The conditional inflation forecast is based on the assumption that the SNB policy rate remains at –0.75% over the entire forecast horizon.

SNB is maintaining its existing baseline scenario for the global economy.

According to the initial estimate, the swiss economy grew by 1.6% in the third quarter.

Expects momentum to remain modest over the short term.

Monetary policy easing is likely to contribute to the economy – and thus also inflation – picking up again over the medium term.

GDP is likely to expand by around 1% in 2019, and the SNB expects growth of between 1.5%and 2% in 2020.

Imbalances persist on the mortgage and real estate markets.

About SNB Rate Decision

The Swiss National Bank conducts the country’s monetary policy as an independent central bank. It is obliged by the Constitution and by statute to act in accordance with the interests of the country as a whole. Its primary goal is to ensure price stability, while taking due account of economic developments. In so doing, it creates an appropriate environment for economic growth.

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD hits two-month lows amid USD strength

EUR/USD has pared its gains that followed upbeat preliminary PMIs for Germany came out above expectations, pointing to a recovery. The USD is advancing amid fears of the coronavirus.

EUR/USD News

GBP/USD drops below 1.31 amid USD strength, fails to sustain PMI gains

GBP/USD is trading below  1.31 after hitting a fresh high of 1.3172. The UK Manufacturing PMI beat with 49.8 and Services PMI with 52.9. The USD is gaining ground across the board.

GBP/USD News

Cryptos: Bears take over and draw a bloody moon

Despite appearances, Bitcoin is the asset with the best risk/benefit ratio. The current falls are adjusted to the ranges of the previous rise. Downward momentum expires in the first half of February.

Read more

Gold rebounds above $1560

The XAU/USD pair dropped to a daily low of $1556.70 during the European trading hours as the easing worries over coronavirus becoming a global epidemic and a broad-based USD strength put the pair under bearish pressure.

Gold News

USD/JPY drops to two-week lows near 109.30

The USD/JPY pair reversed its direction during the American trading hours as the risk-off atmosphere allowed the JPY to find demand as a safe-haven.

USD/JPY News

Forex MAJORS

Cryptocurrencies

Signatures