The Swiss National Bank does not like the strength of the franc, but does not make any changes to policy. They reserve the right to intervene in markets if necessary. They still expect to see the currency weaken over time. The Libor rate remains at -0.25% and the deposit rate at -0.75%. The negativity remains but does not deepen.
EUR/CHF was sliding towards the publication, and slides to counter 1.06 afterwards. This seems more related to the euro’s fresh weakness. USD/CHF is stable around parity.
As everybody remembers, on January 15th, the SNB shocked markets with a removal of the floor of 1.20 under 1.20. This triggered extreme moves on non-existing liquidity and big shocks to forex brokers as well.
As part of that decision, the SNB set deeper negative rates in order to discourage inflows into Switzerland.
Is the SNB trying to remain out of the spotlight after the action in January? Thomas Jordan and his institution have come under heavy criticism in their own country as well as abroad for abandoning the peg on that fateful day in January.
