Earlier today, the Swiss National Bank maintained its benchmark interest rates at the current low (-0.75%). The central bank’s 3-month target Libor range stayed at -1.25% through -.25%. Though the analysts’ consensus agreed with the SNB’s decision, many argued that it was time for more efforts from the SNB to devalue the Swiss Franc which is considered overvalued. Moreover, it was felt that the additional easing measures to be undertaken by the European Central Bank would push the Swiss Franc higher.
As reported at 11:00 am (GMT) the CHF/EUR was trading at 1.0821 Swiss Francs, down 0.14%; the pair ranged from 1.0805 Swiss Francs to 1.0847 Swiss Francs. The USD/CHF was 0.57% higher at 0.9891 Swiss Francs, not too far from the session peak at 0.9908 Swiss Francs.
SNB Could Still Intervene
The statement which followed the SNB decision, did however, suggest that the central bank would intervene in the currency, if and when necessary. During times of global uncertainty, the Swiss Franc has been one of the go-to currencies for safe haven seekers. The central bank has intervened unexpectedly in the past, and analysts say that FX traders should bear that in mind. Analysts say that though the ECB’s most recent policy decisions weren’t as aggressive as some had expected, the depreciating Euro could eventually fall to 1.05 Swiss Francs unless the SNB steps in.