
Brown Brothers Harriman notes the Swiss Franc underperformed as the Swiss National Bank (SNB) kept its policy rate at zero for a fifth straight meeting and resisted market expectations for future hikes. With inflation forecasts still below 1%, BBH argues the widening yield gap versus the US and Eurozone should maintain upside pressure on USD/CHF and EUR/CHF pairs.
"CHF underperformed with the SNB stuck at ground zero. As was widely expected, the SNB kept the policy rate at 0.00% for a fifth consecutive meeting. However, the SNB pushed back against market pricing 50 to 75bps of hikes in the next twelve months."

"The SNB stressed that “monetary policy is appropriate” to keep inflation within its price stability mandate of less than 2% per annum. While the SNB’s inflation projection was raised slightly due to higher prices for oil products, it remains below 1% over the entire forecast horizon."
"Bottom line, widening US-Swiss and EU-Swiss yield gap will keep upside pressure on USD/CHF and EUR/CHF."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)