SNB's 50 bps cut keeps EUR/CHF bears at bay, for now
Dec 12 (Reuters) -The Swiss National Bank's aggressive 50 basis point interest rate cut to 0.5% may help to keep EUR/CHF above the key 0.9200 support level through next month's 10th anniversary of the "Frankenshock".
The safe-haven franc weakened against the euro and dollar following the SNB's half-point rate reduction, when a 25 bps cut was the consensus forecast, with EUR/CHF jumping to threaten 0.9350.
The cross was last at 0.9350 on Nov. 25, after the franc was negatively impacted by SNB Chairman Martin Schlegel mooting the possibility of negative Swiss interest rates hours after EUR/CHF dropped to threaten 0.9200 for the second time this year.
If EUR/CHF drops back towards 0.9200 in the new year, it could raise the risk of the SNB cutting rates by another 50 bps to zero at its next meeting in March.
EUR/CHF was last at or below 0.9200 on Jan. 15, 2015, when it plumbed its all-time EBS low of 0.85 after the SNB's unexpected decision to scrap its 1.20 minimum exchange rate.
Related comment: nL2N3N0078
For more click on FXBUZ
EURCHF https://tmsnrt.rs/4fkvg6l
(Robert Howard is a Reuters market analyst. The views expressed are his own)
</body></html>Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
