Swiss National Bank Holds Rates But Strikes Dovish Tone, Keeping Franc Under Pressure
The Swiss National Bank held rates but surprised markets with a dovish tone, downplaying second-round inflation effects and tweaking its foreign-exchange stance, according to ING's Francesco Pesole. The dovish signals have kept the Swiss franc under pressure against the US Dollar. Pesole, writing for ING, said the central bank's adjustments to its FX stance accompanied the decision to leave rates unchanged. The SNB's downplaying of second-round inflation effects was the element that caught markets off guard.
USD/CHF Hits Highest Since May 2025 After SNB Holds Rate at 0%
USD/CHF climbed to its highest level since May 2025 on Thursday as the Swiss Franc weakened across the board following the Swiss National Bank's decision to leave its policy rate unchanged at 0%. The SNB's hold at 0% drove broad Swiss Franc weakness, lifting the pair to its strongest since May 2025. With bulls remaining in control, the Relative Strength Index is nearing overbought territory.
Swiss National Bank holds policy rate at 0%, ready to intervene in currency markets if needed
The Swiss National Bank on the 24th left its policy rate unchanged at 0%. The hold was in line with expectations. The central bank said it is prepared to act in foreign exchange markets as necessary to ensure appropriate monetary conditions, as the Swiss franc softens. In its statement, it noted that while inflation has risen since June, mainly due to higher energy prices, the build-up of medium-term inflationary pressure has remained modest. The August consumer price index accelerated to 0.8% year on year, double July's pace, but remained within the 0% to 2% range the central bank defines as price stability. The central bank used softer language than before, when it said it was stepping up its readiness to intervene in markets to curb a rapid and excessive rise in the franc.
CH-10Y.GB · Monetary · Neutral SNB held its policy rate at 0% as expected, keeping Swiss yields anchored; no change in the rate itself.
USDCHF.FOREX · Monetary · Positive SNB held rates at 0% and softened its intervention language as the franc softens, a relative negative for CHF versus USD.
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