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  • USD/CHF maintained its bid tone and had a rather muted reaction to the SNB decision.
  • The SNB left interest rates unchanged and reiterated the need for FX interventions.
  • A stronger USD, positive risk tone remained supportive of the pair’s intraday uptick.

The USD/CHF pair held on to its modest intraday gains near multi-month tops, around the 0.9370-75 region and moved little after the SNB announced its policy decision.

As was widely expected, the Swiss National Bank (SNB) left its sight deposit interest rate unchanged at -0.75%. In the accompanying statement, the central bank reiterated Swiss franc remains highly valued and the need for currency intervention at its quarterly policy review on Thursday.

Meanwhile, the SNB upgraded its GDP and inflation forecasts for 2021. The economy is now expected to register a growth of 2.5% to 3.0% in the current year and the inflation is seen at 0.2% as against 0.0% anticipated previously, though both are subject to high uncertainty.

The announcement did little to provide any meaningful impetus to the Swiss franc. That said, a combination of factors continued lending some support to the USD/CHF pair. The US dollar stood tall near four-month tops amid the optimism over a stronger US economic recovery.

On the other hand, a generally positive tone around the equity markets undermined the safe-haven CHF and remained supportive of the USD/CHF pair’s modest uptick. However, the lack of any strong follow-through buying warrants some caution before placing fresh bullish bets.

Technical levels to watch