SNB to keep the ‘restrictive door’ wide open for now, support the franc – Commerzbank
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The Swiss National Bank (SNB) will deliver a 75 basis points rate hike this week, in the opinion of economists at Commerzbank. Therefore, the Swiss franc is expected to remain on a solid foot.
“The SNB will hike by 75 bps to 0.50%. By doing that the SNB does not take any major risks as the market is pricing in this step so the effect on the franc is likely to be limited. If, however, the SNB seems surprisingly moderate in its statement as far as future rate hikes are concerned that might put downside pressure on CHF. In my view that would not be in the SNB’s interest as it also wants to intervene against a weak franc.”
“It is likely to keep the ‘restrictive door’ wide open for now, which should support the franc in principle.”
“I do not want to exclude a 100 bps step completely as the SNB might try to rely more on frontloading to move the key rate away from zero more quickly – the SNB can always be relied upon for a surprise. A step of this magnitude would no doubt be positive for CHF.”
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