CHF: SNB refrains from surprises – Commerzbank

When the Swiss National Bank (SNB) announced its decision yesterday, some analysts seemed to have been anticipating a repeat of negative interest rates in Switzerland, Commerzbank's FX analyst Michael Pfister notes.

CHF benefits from the SNB decision

"One Bloomberg headline initially reported that interest rates had been cut to -0.25%. This information was, of course, incorrect; the SNB actually decided to cut interest rates to 0%. However, this illustrates how close the decision was."

"The Swiss franc benefited from the decision and some expectations of further interest rate cuts were priced out. SNB President Martin Schlegel's emphasis on the 'big unwanted side effects' of negative interest rates certainly helped."

"Provided the Swiss franc does not appreciate significantly or too quickly, and we do not experience more pronounced deflation in Switzerland, we remain comfortable with our forecast of a slightly stronger franc and unchanged key interest rates in the coming months."