The EURCHF exchange rate has an important interest rate decision ahead on Thursday.
EURCHF – Daily Chart
The EUR/CHF has declined from its August highs, opening the door to a retest of the 0.9268 support and the yearly low at 0.92195.
The Swiss National Bank has its interest rate decision released at 15:30 pm HKT on Thursday. The press conference will follow at 4 pm.
The SNB is widely expected to hold its policy rate at zero throughout 2026, as inflation remains on target. However, the press conference may give some insight into the bank’s view of the currency rate.
The bank famously devalued the Swiss franc in 2024, causing chaos among brokers after the country’s safe-haven status led the currency to become too strong. The SNB now has the lowest interest rate among major central banks, but inflation is contained, meaning the previous era of negative rates is still far away.
Earlier this month, SNB Chairman Martin Schlegel stated that there were “undesirable side effects” associated with negative interest rates. The SNB will keep its main policy rate at 0% on Thursday, marking the first pause since December 2023, according to a majority of economists.
“We updated our view and now expect a policy rate hold, rather than one more cut, after inflation printed above our forecasts over the summer,” said Josie Anderson, economist at Nomura.
“In addition, hawkishness from the ECB at recent meetings suggests the ECB is unlikely to cut its policy rate again for the foreseeable future, limiting the prospect of CHF appreciation,” she added.
The current stability means that intervention is not needed, but the end of ECB interest rate cuts may dampen demand for the euro. The real headwind would be an escalation of the war between Russia and Ukraine. U.S. President Trump appears to have abandoned peace talks with a social media post furthering support for Europe and Ukraine in the conflict.
That could see a flight from the euro and a rush to the franc after recent drone flights in Poland and other neighbouring states.
