The SNB cuts the rate to zero, the USD/CHF remains stable in the middle of a trade reduced by the holiday

• The USD/CHF remains plane about 0.8186 while the Juneteenth holiday maintains light volumes.
• The SNB surprises with a 0%basic point cut, leaving it with the lowest rates between its peers.
• The 10 -year Swiss bonus performance rises to 0.3% for tensions in the Middle East and politics signs.

The Swiss Franco (CHF) remains stable against the US dollar (USD) on Thursday, showing a moderate price evolution while operators digest the decision of the Swiss National Bank (SNB) to cut its key policy rate at 25 0%basic points. With the liquidity reduced by the festivities due to the observance of the Juneteenth in the US, the USD/CHF pair remains in general plane, lacking a clear direction in moderate trade conditions.

At the time of writing, the USD/CHF is quoted around 0.8186, moving just below its maximum intradic of 0.8215. The pair had been in an upward trend during the last four sessions, but now it struggles to break the immediate resistance in the 21 -day exponential mobile average (EMA), currently seen about 0.8205.

The expected SNB movement to cut the rates to zero has consolidated its position as the central bank with the lowest indebtedness costs between the main economies, underlining its determination to address the persistent deflationary pressures and stop the persistent strength of the Swiss Franco. The market assessment now suggests a probability of approximately 53% of another rate cut at the September meeting, reflecting the expectations of investors that those responsible for the policy could bow even more towards a moderate position if the economic background is further softened.

In his policy statement, the Central Bank stressed that inflationary pressures have “decreased compared to the previous quarter” and promised to remain “active in the currency market as necessary.” Talking with Reuters, President Martin Schlegel acknowledged that moving more deeply in negative rates would not come without costs, warning that such a step could raise challenges for savers, pension funds and the real estate sector. Schlegel emphasized that any decision to carry the rates below zero would be addressed with caution and only if economic conditions deteriorate significantly.

Updated SNB projections show that annual inflation is expected to average only 0.2% in 2025, before increasing slightly to 0.5% in 2026 and 0.7% in 2027.

Meanwhile, the performance of the Swiss government bonus at 10 years rose to 0.3%, driven by a mixture of increasing tensions in the Middle East and new policy signs of both SNB and the US Federal Reserve persistent and a less favorable global economic landscape.