EUR/CHF Edges Higher as SNB Tweaks Language
- The Swiss Franc remains ‘highly valued’ and the SNB remains willing to intervene
- 2017 inflation forecast nudged higher to 0.4% from 0.3%
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The Swiss National Bank left all policy levers unchanged at its latest MPC meeting but downgraded the currency’s valuation. At the June meeting the SNB said that the currency was ‘significantly overvalued’ while today the central bank noted that the CHF ‘remains highly valued’. The SNB said that since the last monetary policy assessment the CHF had weakened against the EUR and appreciated against the USD helping to reduce to some extent the significant valuation of the currency.
“The Swiss franc nevertheless 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 as necessary therefore remain essential in order to reduce the attractiveness of Swiss franc investments and thus ease pressure on the currency.”
The central bank also revised slightly higher both 2017 and 2018 inflation forecasts to 0.4% from 0.3% and upped their 2019 forecast to 1.1% from 1.0%.
Chart: EURCHF Five Minute Timeframe (September 14, 2017)
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--- Written by Nick Cawley, Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.