USD/CHF hangs near multi-year lows, moves little post-SNB

The USD/CHF pair remained depressed near multi-year lows, around the 0.8830 region through the early European session and moved little post-SNB.

The Swiss National Bank (SNB) announced its latest monetary policy decision this Thursday and decided to leave the benchmark interest rate unchanged at -0.75%. In the accompanying statement, the SNB reiterated that the Swiss franc is highly valued and that is will remain active in the FX market as necessary.

The announcement, however, turned out to be a non-event for the market and did little to provide any meaningful impetus to the USD/CHF pair. That said, the prevalent bearish sentiment surrounding the US dollar exerted some pressure for the fourth consecutive session and held the pair near multi-year lows touched on Wednesday.

The USD Index tumbled to the lowest level since April 2018 amid growing prospects for additional US fiscal stimulus and dovish sound FOMC on Wednesday. At the last meeting of the year, the Fed promised to keep interest rates near zero for years to come and continue its bond-buying program until the US economic recovery is secure.

Meanwhile, the prevalent upbeat market mood – amid the optimism over COVID-19 vaccine rollouts and hopes for a Brexit deal – did little to undermine the safe-haven CHF or lend any support to the USD/CHF pair. This, in turn, supports prospects for further weakness, through oversold conditions might help limit the downside.

Market participants now look forward to the post-meeting SNB press conference for some impetus. Later during the early North American session, the US economic docket – featuring the releases of the Philly Fed Manufacturing Index, Initial Weekly Jobless Claims and housing market data – will also be looked upon for some short-term trading opportunities.

Technical levels to watch