November 24, 2022
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  • SNB raises policy rate by 75 basis points to 0.50%, as expected

SNB raises policy rate by 75 basis points to 0.50%, as expected

By on September 22, 2022 0
  • Before -0.25%
  • Policy tightening aims to counter further rise in inflationary pressures
  • It cannot be excluded that further increases are necessary to ensure price stability
  • Also willing to be active in the forex market if needed
  • Sees 3% inflation for 2022 (previously 2.8%)
  • Sees inflation at 2.4% in 2023 (previously 1.9%)
  • Sees inflation at 1.7% in 2024 (previously 1.6%)
  • Only expects weak economic growth in the baseline scenario
  • Full statement

Buy the rumour, sell the fact? That may be the case, as the market reaction is certainly interesting, with the Swiss franc weakening significantly thereafter, despite the SNB ending the era of negative interest rates. Some commentators point to language in the statement that the central bank says it will be “willing to be active in the foreign exchange market if necessary,” but this was also worded similarly in their last policy statement in June.

EUR/CHF

EUR/CHF

EUR/CHF is the currency pair comprising the single currency of the European Union, the euro (symbol €, code EUR) and the Swiss franc (code CHF). The price of the pair indicates how many Swiss francs are needed to buy one euro. For example, when EUR/CHF is trading at 1.1000, it means that 1 euro equals 1.1 Swiss francs. The Euro (EUR) is the second most traded currency in the world, while the Swiss Franc (CHF) is the sixth most traded currency in the world, resulting in a relatively liquid trading pair. Swiss National Bank Crisis EUR/CHF is most often defined by the events of January 15, 2015 – the date the Swiss National Bank (SNB) decided to lift the cap on the Swiss franc from 2011. maximum of just over 0.83 euros, which means that EUR/CHF would not be allowed to fall below 1.2. The reason the cap was imposed in the first place was triggered by the Eurozone debt crisis. The Swiss government feared that increased investment in its national currency would hamper its economy and exports, with the SNB explaining: period of exceptional overvaluation of the Swiss franc and extremely high uncertainty in financial markets. This exceptional and temporary measure has protected the Swiss economy from serious harm.” In early 2015, the SNB decided that its franc was in a much healthier environment and not as overvalued as before – leading to the decision to drop the peg to the euro, thus sending the EUR /CHF smash the 1.2 level. The crash caused immense losses for forex traders and brokers, with many brokers going bankrupt. Perhaps the most high-profile casualties are Alpari UK, along with FXCM and its subsequent bailout. For surviving brokers, they had no choice but to stop trading all CHF pairs. With the Euro peg in place, it was not uncommon for traders to use it to their advantage, buying EUR/CHF as the price approached the 1.2000 levels. Traditionally, EUR/CHF is seen as a good candidate for scalping, due to its relatively predictable price action (despite the SNB flash crash) and stable spread. Trading EUR/CHF, however, generally requires more patience compared to other pairs, thanks to its lower volatility.

EUR/CHF is the currency pair comprising the single currency of the European Union, the euro (symbol €, code EUR) and the Swiss franc (code CHF). The price of the pair indicates how many Swiss francs are needed to buy one euro. For example, when EUR/CHF is trading at 1.1000, it means that 1 euro equals 1.1 Swiss francs. The Euro (EUR) is the second most traded currency in the world, while the Swiss Franc (CHF) is the sixth most traded currency in the world, resulting in a relatively liquid trading pair. Swiss National Bank Crisis EUR/CHF is most often defined by the events of January 15, 2015 – the date the Swiss National Bank (SNB) decided to lift the cap on the Swiss franc from 2011. maximum of just over 0.83 euros, which means that EUR/CHF would not be allowed to fall below 1.2. The reason the cap was imposed in the first place was triggered by the Eurozone debt crisis. The Swiss government feared that increased investment in its national currency would hamper its economy and exports, with the SNB explaining: period of exceptional overvaluation of the Swiss franc and extremely high uncertainty in financial markets. This exceptional and temporary measure has protected the Swiss economy from serious harm.” In early 2015, the SNB decided that its franc was in a much healthier environment, and not as overvalued as before – leading to the decision to drop the peg to the euro, thus sending the EUR/CHF smash the 1.2 level. The crash caused immense losses for forex traders and brokers, with many brokers going bankrupt. Perhaps the most high-profile casualties are Alpari UK, along with FXCM and its subsequent bailout. For surviving brokers, they had no choice but to stop trading all CHF pairs. With the Euro peg in place, it was not uncommon for traders to use it to their advantage, buying EUR/CHF as the price approached the 1.2000 levels. Traditionally, EUR/CHF is seen as a good candidate for scalping, due to its relatively predictable price action (despite the SNB flash crash) and stable spread. Trading EUR/CHF, however, generally requires more patience compared to other pairs, thanks to its lower volatility.
Read this term had a big jump from 0.9470 to 0.9600 currently.