SNB 50 bps December cut may keep EUR/CHF bears at bay
Nov 29 (Reuters) -If the Swiss National Bank opts to halve interest rates by cutting 50 basis points to 0.5% on Dec. 12, it should help to keep EUR/CHF above the key 0.9200 support level, even if the European Central Bank also cuts by 50 bps a few hours later that day.
However, a conservative 25 bps rate reduction from the SNB followed by an aggressive 50 bps ECB cut on Dec. 12 would increase the risk of EUR/CHF dropping through 0.9200 for the first time since the "Frankenshock" in January 2015.
EUR/CHF fell to threaten 0.9200 after worse-than-expected euro zone PMI data last week, before jumping on dovish guidance from SNB Chairman Martin Schlegel, who said the SNB will reintroduce negative rates if necessary.
The key Swiss data release before the SNB rate decision is inflation data for November, due on Dec. 3. Another softer than expected print, to follow October's 0.6% YY, would get doves coooing for a jumbo cut from the SNB.
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(Robert Howard is a Reuters market analyst. The views expressed are his own)
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