Investors expect the Swiss National Banks (SNB) to cut its deeply negative interest rates in response to an increasingly expansive mood at the European Central Bank (ECB).
On Wednesday, money markets were pricing a 54% probability of SNB reducing its benchmark rate of -0.75% — already one of the lowest in the world — by 25 basis points by September, according to Reuters.
The probability for a cut by December stood at 72% on Wednesday, up from 62% observed on Tuesday.
The SNB may feel pressured to ease rates with the EUR/CHF pair currently trading at 1.0967, the lowest level since July 2017.
The Swiss Franc (CHF) may rise even further if the European Central Bank sends out a strong dovish message later today, forcing markets to price in the possibility of aggressive rate cuts in the near future.That would further ramp up pressure on the SNB to act.
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.