The Swiss National Bank kept its monetary policy unchanged at today’s meeting, leaving interest rates in the negative territory. The Swiss franc fell against the US dollar after the announcement but gained on the euro and was little changed against the Japanese yen.
The SNB kept borrowing costs unchanged today, mentioning that negative interest rates make the franc less attractive as an investment option. Still, the central bank said in the statement:
Overall, the Swiss franc is significantly overvalued and should continue to weaken over time.
Additional negativity came from the site of Switzerland’s federal authorities that reported a drop of the trade balance surplus. On top of that, the growth forecast was revised negatively and the strength of the franc was cited as a reason for the revision:
Since the decision of the Swiss National Bank (SNB) taken on 15 January to abolish the exchange rate floor of 1.20 franc to 1 euro and the subsequent appreciation of the Swiss franc, the economic indicators for Switzerland have worsened.
It looks like Swiss officials want to see the franc weakening, and it is not a good sign for the currency.
USD/CHF rose from 0.9823 to 0.9939 as of 12:50 GMT today. EUR/CHF went down from 1.0633 to 1.0595. CHF/JPY traded at 121.61 after opening at 122.27
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