Home SNB rate cut rattles markets
Daily Look

SNB rate cut rattles markets

The impact of the SNB’s decision to remove the cap on the CHF proved to be a game-changed for markets. The SNB clearly expected an outsized reaction, judging from the comments from Governor Jordan in the wake of the decision. The accompanying rate cut of 50bp was, in part at least, designed to provide and offset, pushing interest rates further into negative territory. For now though, the negative carry on the Swissy has done little to temper the currency after the initial reaction. The extent of the CHF move lead to an out-sized ranged elsewhere, with more than a 2-big figure range on EURUSD proving to be 2.5 times the daily average range of the last month.

The extent of yesterday’s moves are going to push today’s data into the background. Final inflation data for the Eurozone is released at 10:00 GMT, with the move into negative territory on the flash estimate likely to be confirmed by the final release (at -0.2%). US inflation data is also released today, with the headline rate here seen falling to 0.7%, from 1.3%. In FX, we are set to see the CHF continue to look for a comfortable level, having already traded a 5 big figure range on EURCHF over the past twelve hours.

Further reading:

FxPro - Forex Broker

FxPro - Forex Broker

Forex Broker FxPro is an international Forex Broker. FxPro is an award-winning online broker, offering CFDs on forex, futures, indices, shares, spot metals and energies, serving clients in more than 150 countries worldwide. FxPro offers execution with no-dealing-desk intervention and maintains a client-centric business model that puts customer needs at the forefront of our operations. Our acquisition of leading spot FX aggregator, Quotix, enables us to offer access to a deep pool of liquidity, as well as top-class order-matching and some of the most competitive spreads in the market. FxPro is one of only few brokers offering Negative Balance Protection, ensuring that clients cannot lose more than their overall investment. FxPro UK Limited is authorised and regulated by the Financial Conduct Authority (registration number: 509956). FxPro Financial Services Limited is authorised and regulated by the Cyprus Securities and Exchange Commission (licence number: 078/07) and by the South Africa Financial Services Board (authorisation number 45052). Risk Warning: Trading CFDs involves significant risk of loss.