This report will look at the ECB decision last week and the impact it has had on the Swiss Franc.

Negative interest rates in Switzerland may make CHF cheaper

The value of the Swiss Franc has been significantly impacted recently by the commentary from the European Central Bank (ECB). However, they are back in the forefront of people’s minds this week as on Thursday the Swiss National Bank (SNB) set interest rates.

Remember that the SNB are not afraid to intervene so this meeting will be looked at keenly. Mario Draghi of the ECB put less emphasis on rate cuts last week than expected so many don’t expect the SNB to introduce any further rate cuts themselves. Instead, with Swiss inflation looking worrying, (like most economies globally), I would not be surprised if they go down a different route with alternative measures being announced.

My personal prediction is that we may get a further update on the negative interest rates also implemented by the SNB. This would be in an effort by the bank to push Swiss investments abroad. Personally I expect the CHF to get cheaper on Thursday as a result on this release. Good news for anyone who is looking at buying CHF as rates currently sit close to the lowest levels seen for several years.

I would greatly appreciate any feedback you may have on todays market report. Feel free to e-mail me at teh@currencies.co.uk.

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