• EUR/CHF extends losses for a third straight day as the Swiss Franc strengthens following the SNB’s latest policy decision.
• SNB keeps the policy rate unchanged at 0%, in line with expectations, maintaining a cautious but steady policy stance.
• Focus shifts to next week’s ECB meeting, where policymakers are widely expected to keep all key rates unchanged.

The Euro (EUR) edges lower against the Swiss Franc (CHF) on Thursday as the CHF strengthens in the aftermath of the latest Swiss National Bank (SNB) interest rate decision. At the time of writing, EUR/CHF is trading around 0.9330, extending losses for the third straight day as traders respond to the SNB’s cautious but steady policy tone.

The SNB left the policy rate unchanged at 0%, in line with expectations. Policymakers reiterated that the central bank remains ready to intervene in foreign exchange markets if needed, while emphasising that the current low rate environment helps maintain price stability and support economic activity. The central bank noted that inflationary pressure remains virtually unchanged compared with the previous assessment.

In its updated projections, the SNB said inflation dipped to 0.0% in November, down from 0.2% in August. However, the medium-term outlook remains stable, with the SNB forecasting average inflation of 0.2% in 2025, 0.3% in 2026, and 0.6% in 2027, assuming the policy rate stays at 0% over the entire forecast horizon.

On the domestic front, Switzerland’s economy contracted in the third quarter. Even so, the economic outlook has improved modestly on slightly better global conditions, with Gross Domestic Product (GDP) expected to expand by just under 1.5% in 2025 and around 1% in 2026.

During the post-meeting press conference, SNB Chairman Martin Schlegel said the bank’s monetary stance will remain expansive, adding that policy is expected to “stoke inflation slowly in the next quarters.” He reiterated that the SNB is willing to introduce negative rates if needed, noting that negative rates in the past helped reduce the attractiveness of the Franc.

At the same time, he stressed that the probability of returning to negative rates has not increased and that the hurdle for using them is now higher. Schlegel also underlined that the SNB has no preference for inflation as long as it remains within its target range, and noted that while the unemployment rate is expected to rise slightly, it could fall again further ahead.

Looking ahead, attention now turns to next week’s European Central Bank (ECB) interest rate decision. The ECB is widely expected to keep all three key policy rates unchanged, with speculation building around the possibility of a rate hike next year following a series of firmer remarks from policymakers this week.