Weaker CHF leaves more options on the table for SNB

Reporting by Ralph Atkins and Roger Blitz for The Financial Times reveals that the SNB may have to take action at some point in the future now that the CHF has returned to the 1.2 level against the EUR that initially forced the Swiss central bank to impose controls on the currency.

Key quotes

"The Swiss franc has fallen to its cheapest level against the euro since January 2015, when the Swiss National Bank stunned markets by abandoning a cap that limited the currency’s strength."

"Although Thomas Jordan, SNB chairman, has a chance to comment on the franc at Friday’s annual shareholders’ meeting, the next scheduled monetary policy meeting is not until June."

"A weaker “Swissie” helps the economy, and at some point could see the central bank begin to talk publicly about reversing negative interest rates and normalising a monetary policy that has led it to buy everything from German Bunds to US shares."

"The factors that led to the abandonment of the peg three years ago, including the start of quantitative easing by the European Central Bank, are reversing."

"Its main policy interest rates level sits at the ultra-low level of minus 0.75 per cent set in January 2015. Last week, Mr Jordan told Bloomberg there was no hurry to change policy."

"The SNB still regards the economic and financial environment as fragile — political instability, especially in Europe, could quickly send investors back into the franc, pushing up its value again."

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