He EUR/CHF rebounded after the SNB’s firm monetary policy announcement. The economists of Rabobank They analyze the pair’s prospects.
CHF may be subject to safe-haven capital inflows as risks in the Eurozone increase
Today’s statement from the SNB makes it very clear why it surprised the market by keeping rates on hold this morning. Although the central bank left the door open for another rate hike, the outlook for growth and inflation in Switzerland suggests it has probably done enough already.
However, one obvious concern is the impact on the currency of an unexpected decision to leave rates unchanged in a month when the ECB opted to raise them. To counter an inflationary fall in the value of the CHF against the EUR, the SNB included in the first paragraph of today’s statement the warning that it is “willing to be active in the currency market as necessary.” In the current environment, the focus is on selling currencies.”
Looking ahead, we expect the worsening growth outlook in the Eurozone to allow EUR/CHF to return below the 0.95 level in the fourth quarter on safe haven flows.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
