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 0830 GMT today, with markets widely expecting the SNB to leave the sight deposit rate unadjusted 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 required.

Little reaction is expected in the Swiss Franc post-the SNB policy announcement, as a status-quo is widely priced-in by the markets.

How could it affect USD/CHF?

Analysts at Barclays noted: “We continue to project trend franc depreciation, as the SNB lags other central banks in normalizing policy. Yet, a set of low-probability SNB actions introduce asymmetric downside risks to EURCHF and our forecasts. In particular, an acknowledgment by the SNB that the CHF is not so very overvalued anymore, following c.6% REER depreciation H2 2017, or any signs of SNB fatigue or discomfort with the current size of the balance sheet, could prove market moving, yet the timing is hard to gauge.”

In terms of the technical levels, “the Dollar has lifted against the Swiss Franc since mid-February's low of 0.9187, but the recent turnaround from 0.9534 sees the pair running into resistance-turned-support from the 34 EMA, and a push higher will need to see the pair push through resistance at the last swing high of 0.9480 on H4 charts, and the March high of 0.9534. Meanwhile, a continued decline will face support at the last swing high and 34 EMA confluence at 0.9424, last week's swing low of 0.9357,” Joshua Gibson, Analyst at FXStreet writes.

Key Notes:

USDCHF: prefer to look to buy dips, possibly nearer 0.9400

US$Chf traded a little lower on Wednesday, taking the dollar down to 0.9423 before settling the day at 0.9445.  All will now depend on today’s SNB Interest Rate Decision although no change to policy is expected.

USD/CHF one to watch amid heightened trade war fears, SNB decision

As pressure on the dollar from weak data and trade war fears continued, USD/CHF traders were additionally anticipating Thursday’s monetary policy and the rate decision from the Swiss National Bank.

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.