When is the SNB rate decision and how could it affect USD/CHF?
SNB Interest Rate Decision Overview
The Swiss National Bank (SNB) board members are widely expected to leave their monetary policy settings unadjusted, with the sight deposit rate maintained at -0.75% while holding the 3-Month Libor Target Range between -1.25% to -0.25%. The SNB is scheduled to release its quarterly monetary policy assessment at 0830 GMT
At its September monetary policy decision, the SNB predicted that the economy to contract by about 5% and that the inflation rate was seen below 1% until the first quarter of 2021. The central bank reiterated its readiness to intervene in the market more strongly to devalue the franc, as it continues to believe that the CHF exchange rate is ‘highly overvalued’
The main focus will remain on the SNB Chairman Thomas Jordan’s press conference that will be followed soon at 0900 GMT. His comments will be closely eyed for the central bank’s response to the accusations by the US Treasury, calling Switzerland a currency manipulator
How could it affect USD/CHF?
The Swiss Franc is unlikely to see any major price-action on the SNB policy announcement, although of note will be its response to the USTR’s currency manipulator label, as mentioned above.
The USD/CHF pair wallows in six-year lows near 0.8830 ahead of the policy decision, largely weighed down by broad-based US dollar weakness. The US Treasury’s branding of the Swiss as a currency manipulator seems to bode well for the CHF, as it would limit the nation’s ability to stem the currency’s rise
In terms of the technical levels, “the immediate resistance awaits at 0.8850, above which the 10-DMA at 0.8877 could be tested. Alternatively, a breach of the 0.8800 psychological magnate could expose the classic daily S3 at 0.8754”
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
