Swiss bank raises interest rates, what is the trend of US dollar / Swiss Lang? Lock foreign exchange mt4 MT5 trading market

On Thursday (June 16), the Swiss central bank announced the latest interest rate resolution in June, and the Swiss central bank raised the policy interest rate from -0.75% to -0.25%. The bank unexpectedly raised interest rates by 50 basis points than expected. The interest rate adjustment is the first time that the Swiss central bank has adjusted the interest rate in seven years, and market expectations remain unchanged. In the market, after the announcement of the resolution, the dollar fell 1% against the Swiss Franc in the day, close to 180 points, and the euro fell 1.2% against the Swiss Franc after the Swiss central bank raised interest rates.

In the policy statement of the resolution, the Swiss central bank pointed out that in terms of policy prospects, the bank pointed out that the tight monetary policy was designed to prevent inflation from spreading more widely to Swiss goods and services. It is not ruled out that it is necessary to further raise the policy interest rate. It cannot be ruled out that it is necessary to further raise the policy interest rate of the Swiss central bank in the foreseeable future to stabilize inflation within the range consistent with medium-term price stability.

In addition, the bank also adjusted the threshold factor used to calculate the level of bank spot deposits and exempted negative interest rates.

In terms of economic prospects, the bank expects the CPI to be 1.9% in 2023; 1.6% in 2024. The inflation rate is expected to be 2.8% in 2022 (previously predicted to be 2.1%). It is expected that the Swiss economy will grow by about 2.5% in 2022 and about 2.5% in March. The inflation rate is expected to be 2.1% in the first quarter of 2025. Global supply bottlenecks and further increases in commodity prices may also slow economic growth.

In terms of exchange rate, the Swiss central bank acts to ensure appropriate monetary conditions, and the Swiss central bank is also willing to actively participate in the foreign exchange market when necessary. If the energy supply in Europe is adversely affected, it will have a serious impact on the Swiss economy. The bank will continue to pay close attention to the development of mortgage and real estate markets.

Geographically, the bank pointed out that the Russian Ukrainian conflict has so far had a relatively small negative impact on Swiss economic activities. The impact of the conflict between Russia and Ukraine is most obvious in terms of rising energy prices and supply bottlenecks.

Since January 2015, the Swiss central bank has kept the negative interest rate policy unchanged. UBS economists' team predicted that the SNB would continue to raise interest rates by 50 basis points in September and another 25 basis points in December, which means that the era of negative interest rates should be completely over by the end of the year. But UBS experts also admitted that the uncertainty will remain high.

The war in Ukraine may escalate, there may be a natural gas embargo, and the economic recession in Europe will further destabilize the market. They said that all these could significantly change the policy of the European Central Bank. In view of the fact that the inflation rate in Switzerland is far lower than that in the surrounding euro zone countries, the Swiss central bank should not raise interest rates too much.

Economists at other banks also pointed out that the inflation rate in Switzerland was low and concluded that interest rates would rise for the first time in September. In May, the inflation rate in Switzerland was 2.9%. The Swiss central bank followed the medium-term target and maintained price stability by controlling the inflation rate in the range of 0% to 2%.

UBS believes that it is time for the Swiss central bank to stop talking about the strength of the Swiss Franc in order to prepare for the interest rate inflection point. The Swiss central bank previously insisted that the Swiss Franc exchange rate was overvalued, largely defending the implementation of expansionary monetary policy.

Given that there is still a lot of uncertainty, especially with regard to Ukraine, many people believe that the Swiss central bank may be cautious, and all economists agree.