USD/CHF retreats from 3-month tops, plummets below mid-0.9900s post-SNB

  • SNB leaves sight deposits rate unchanged at -0.75% and is ready to intervene in the FX market as necessary.
  • SNB also lowers its inflation forecasts for 2019/20/21 and GDP estimates for 2019 but fails to impress bulls.

The USD/CHF pair retreated sharply from three-month tops and dropped to fresh session low, farther below mid-0.9900s post-SNB.
With investors still assessing Wednesday’s hawkish cut by the Fed, the pair witnessed some aggressive long-unwinding trade in the last hour after the SNB announced its latest monetary policy decision and left sight deposits rate unchanged at -0.75%.
In the accompanying statement, the central bank said that trade tensions could further hurt the global economy and expansionary monetary policy continues to be necessary. The SNB also reiterated the willingness to intervene in the FX market as necessary and lowered its inflation and GDP forecast for 2019, though failed to impress the bulls.
Given the recent escalation of geopolitical tensions in the Middle East, a slight deterioration in the global risk sentiment underpinned the Swiss Franc’s safe-haven status and seemed to be one of the key factors that prompted some profit-taking around the major.
It, however, remains to be seen if the current slide marks the end of the recent bullish trajectory or continues to attract some dip-buying interest at lower levels amid confusion over another Fed rate cut later this year.

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