When is the SNB rate decision and how could it affect USD/CHF?


SNB Interest Rate Decision Overview

The Swiss National Bank (SNB) is scheduled to release its quarterly monetary policy assessment at 0730 GMT today, with markets widely expecting the SNB to leave the sight deposit rate unchanged at -0.75% while maintaining the 3-Month Libor Target Range between -1.25% to -0.25%.

The bank is expected to reiterate the overvalued status of the CHF. The SNB is also likely to express its strong commitment to intervene in the fx markets whenever necessary.

At its June monetary policy decision, the SNB cut its inflation outlook for a fourth straight meeting, reiterated its intervention pledge and again called the Swiss Franc “highly valued.” It projected that price growth will average just 0.3% this year and 0.6% in 2020.

The focus also remains on SNB chief Thomas Jordan's press conference that will be soon followed at 0800 GMT. Traders look forward to some dovish remarks from Jordan on the interest rates outlook, given that the recent soft patch of macro data and escalating US-China trade war have prompted major global central banks to adopt a dovish stance on their monetary policy.

How could it affect USD/CHF?

The Swiss Franc is unlikely to see any major price-action on the SNB policy announcement, as a status-quo is already discounted by the markets.

In terms of the technical levels, “Should it manage to cross 200-day simple moving average (SMA) level of 0.9970, 21-day SMA around 1.0006 and five-week-old descending trend-line at 1.0023 can question buyers. In a case where the quote rallies beyond 1.0023, late-May highs around 1.0100 and 1.0125 can regain market attention. On the flipside, 61.8% Fibonacci retracement of January to April upside at 0.9915 and current month low near 0.9855 act as immediate supports for the pair. Given the sellers’ dominance past-0.9855, 0.9790 and the present year bottom around 0.9715 can lure the bears,” Anil Panchal, Analyst at FXStreet writes.

Key Notes:

Swiss government slightly ups 2019 growth forecast to 1.2%

Swiss Govt: Q1 growth was helped by positive one-off factors

About SNB Interest 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.

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