The U.S. Dollar eased slightly from session highs near 0.7980 against the Swiss Franc on Thursday, though the broader bullish trend remains intact, following the release of the Swiss National Bank’s (SNB) latest meeting minutes.
SNB Maintains Policy Rate, Dismisses Deflation Concerns
The Swiss National Bank kept its benchmark interest rate unchanged at 0%, reiterating that the current policy stance remains appropriate. The minutes dismissed concerns about sustained deflationary pressures, suggesting that inflation is not expected to turn persistently negative.
The SNB also ruled out the reintroduction of negative interest rates, indicating confidence in the current economic backdrop despite global trade challenges.
Swiss Economy Seen as Resilient
While the SNB acknowledged the potential impact of U.S. tariffs and slower global demand, policymakers emphasized that the Swiss economy remains resilient, supported by steady domestic indicators pointing to moderate growth.
The release of the minutes gave a modest boost to the Swiss Franc, prompting a brief pullback in USD/CHF, which had earlier risen on moderate risk aversion linked to renewed U.S.–China trade tensions. Earlier, President Trump’s announcement of new restrictions on software exports to China had lent support to the Dollar as investors sought safe-haven assets.
About the Swiss National Bank (SNB)
The Swiss National Bank (SNB) is Switzerland’s central bank, responsible for ensuring price stability over the medium to long term. Its monetary policy is primarily implemented through adjustments to the policy rate and foreign exchange interventions.
- Interest Rate Policy:
When inflation exceeds target levels, the SNB may raise rates to cool price growth, typically strengthening the Swiss Franc (CHF). Conversely, lower rates tend to weaken the currency. - Forex Interventions:
The SNB has historically intervened in currency markets to prevent excessive CHF appreciation, which can hurt exports. Between 2011 and 2015, it maintained a EUR/CHF exchange rate floor. - Policy Meetings:
The SNB conducts quarterly monetary policy assessments in March, June, September, and December, during which it announces policy decisions and publishes medium-term inflation forecasts.
