Swiss Franc Retreats After SNB Rate Decision
14 Settembre 2017 - 07:55AM
RTTF2
The Swiss Franc retreated from recent highs against other major
currencies in the early European session on Thursday, after Swiss
Central Bank maintained negative interest rates in the monetary
policy meeting.
The Swiss National Bank maintained its expansionary monetary
policy and upgraded its inflation projections.
The interest rate on sight deposits at the SNB was retained at
-0.75 percent and the target range for the three-month Libor was
kept unchanged between -1.25 percent and -0.25 percent.
The Bank said the Swiss franc has weakened against the euro and
appreciated against the dollar since the last monetary policy
meeting.
"Overall, this development is helping to reduce, to some extent,
the significant overvaluation of the currency," the Bank said.
Nonetheless, the Swiss Franc remains highly valued and the
situation on the foreign exchange market is still fragile.
The negative interest rate and the SNB's willingness to
intervene in the foreign exchange market therefore remain essential
in order to reduce the attractiveness of Swiss Franc investments
and thus ease pressure on the currency.
In the Asian trading today, the Swiss Franc held steady against
its major rivals.
In the European trading, the Swiss Franc fell to a 2-day low of
114.29 against the yen, from a recent high of 114.74. The Franc may
test support near the 112.00 region.
Against the euro and the pound, the franc dropped to 1.1496 and
1.2769 from a recent 2-day high of 1.1439 and 1.2714, respectively.
If the Franc extends its downtrend, it is likely to find support
around 1.15 against the euro and 1.28 against the pound.
The franc edged down to 0.9659 against the U.S. dollar, from a
recent high of 0.9618. On the downside, 0.97 is seen as the next
resistance level for the franc.
Looking ahead, at 7:00 am ET, the Bank of England releases the
outcome of its monetary policy meeting as well as minutes.
Economists expect the bank to retain interest rates unchanged at
0.25 percent and asset purchase target at GBP 435 billion.
In the New York session, U.S. weekly jobless claims for the week
ended September 9, U.S. CPI data for August and Canada new housing
price index for July are slated for release.
At 11:30 am ET, Deutsche Bundesbank President Jens Weidmann is
expected to speak about monetary policy after a crisis at Goethe
University, in Frankfurt.
At 12:00 pm ET, European Central Bank Executive Board Member
Yves Mersch will participate in closing session "Economic and
Financial Priorities for relaunching the Eurozone and the EU" at
Eurofi Financial Forum 2017 "What way forward for the EU27 and
Eurozone?" in Tallinn.
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