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Swiss Franc Fell to 1.0320 on SNB Jordan Comment on Possible Lower Rates

Posted by Chris Advincula on Dec 15, 2016 7:46:19 AM

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(Dec 15 Thursday) The Swiss National Bank (SNB) left its interest rate unchanged with the target 3-month Libor rate in a range between -1.25% and -0.25%, as expected. The USDCHF made extended gains to 1.0320 from 1.0240 (+80 points) in Europe as the swiss franc weakened further on the bearish comment from the SNB Chairman Thomas Jordan, who said it may become necessary to lower interest rates further.

SNB Chairman Thomas Jordan said that "We cannot rule out that a further step lower will become necessary," in the media press conference after the SNB interest rate announcement. Jordan added, "The SNB's readiness to intervene in the forex markets to keep a lid on the swiss franc remained unchanged, even though the U.S. Federal Reserve's decision to raise U.S. interest rates was sending a positive signal."

The USDCHF rate rose from 1.0120 to 1.0260 yesterday in the NY session following the Fed's decision to raise the Fed Funds rate by 25 basis points to 0.75%. The EURCHF recovered from the dip at 1.0715 and rose to 1.0766 following the SNB announcement. However, it came off to 1.0730 on the weight of euro. EURUSD fell from 1.0525 to 1.0400 in Europe as the U.S. dollar gained strength against the major currencies.

 

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Topics: USDCHF, swiss national bank, EURCHF, US Dollar, SNB, Europe, Forex

 

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