During the Asian trading session on Friday (June 13th), the USD/CHF continued to decline. The latest exchange rate of the USD/CHF was 0.8074, down 0.35%. On Thursday, the USD/CHF dropped to its lowest level in two months, while the USD/CHF fell to its lowest level in about a week.
Adrian Prettejohn, an economist at Capital Economics, said the Swiss National Bank (SNB) is likely to lower its policy interest rate to negative at its meeting next week. Investors have different opinions on this decision.
Data from the London Stock Exchange (LSEG) shows that about two-thirds of investors expect interest rates to be cut by 25 basis points to 0%, and one-third expect them to be cut by 50 basis points to -0.25%. Prettejohn said, “We are now leaning towards the latter and expect interest rates to fall negative for the first time since 2022.”
Previously, the inflation rate had dropped to negative value in May, while the Swiss franc appreciated significantly after President Trump announced the imposition of additional tariffs. He said that the current risk also leans towards the SNB falling below its inflation target of 0%-2% rather than exceeding it.
The SNB is scheduled to hold its next interest rate meeting on June 19th, where it is widely expected to announce another rate cut. The current policy rate is 0.25%, and economists are expecting a cut of at least 25 basis points. However, there is a significant chance that the SNB may opt for a more aggressive easing, with two 50 basis point cuts taking the rate back to -0.75% — the lowest in its history.
Related Topics:
