The Swiss National Bank’s third interest rate cut did not push USD/CHF out of its month-long range between 0.84 and 0.8550, DBS’ FX analyst Philip Wee notes.

SNB does not want EUR/CHF to find new lows

“SNB lowered the policy rate by 25 bps to 1.00% and kept the door open for more easing in the coming quarters on its new forecast for inflation to decelerate to 0.6% in 2025 from 1.2% in 2024.”

“In June, SNB projected a modest slowdown in inflation to 1.1% from 1.3% based on its assumption of a stable 1.25% policy rate over the forecast horizon.” 

“SNB signalled its readiness to intervene in currency markets, reinforcing its concerns about the CHF’s strength as a source of significant disinflation and pressure for Swiss industries amid weak demand from Europe. SNB likely does not want EUR/CHF to post a new year’s low below 0.93.”