Swiss Franc Slides After SNB Holds Expansionary Monetary Policy

The Swiss franc declined against its most major counterparts in the early European session on Thursday, after the Swiss National Bank maintained its expansionary monetary policy and cautioned about the high value of the domestic currency.

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 central bank said it will remain active in the foreign exchange market as necessary, while taking the overall currency situation into consideration.

The central bank lowered its inflation forecast for 2019 to 0.8 percent from 0.9 percent and the estimate for 2020 was downgraded to 1.2 percent from 1.6 percent. The bank retained inflation forecast at 0.9 percent for 2018.

The SNB expects GDP growth of between 2.5 percent and 3 percent for the current year and a further slight fall in unemployment.

The currency was lower against its major counterparts in the Asian session, barring the greenback.

The franc dropped to 1.1320 against the euro, from a high of 1.1283 seen at 5:00 pm ET. The franc is seen finding support around the 1.16 level.

Reversing from a high of 1.2699 touched at 5:00 pm ET, the franc edged down to 1.2748 against the pound. On the downside, 1.30 is possibly seen as the next support level for the franc.

After rising to 0.9656 against the greenback at 3:15 am ET, the franc changed direction and retreated to 0.9674. The next possible support for the franc is seen around the 0.98 level.

On the flip side, the franc appreciated to 116.26 against the yen, from a low of 115.89 set at 1:15 am ET. The franc is poised to find resistance around the 118.00 level.

Looking ahead, U.K. retail sales data for August is due in the European session.

In the New York session, U.S. weekly jobless claims for the week ended September 15, leading index and existing home sales for August are scheduled for release.

At 10:00 am ET, Eurozone advanced consumer sentiment index for September will be out.

The material has been provided by InstaForex Company –

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