The outcome of the Swiss National Bank’s (SNB) policy meeting became the main focus of traders of the USD/CHF currency pair today, where the central bank has decided to leave interest rates unchanged at a low of -0.75%.
As a result of this decision, it was indeed widely expected by the market that the central bank would maintain its very loose monetary policy, despite the face of growing inflationary pressures.
According to a statement issued by the central bank, the SNB’s expansionary policy is said to have provided favorable financing conditions, where it has contributed to a suitable supply of credit and liquidity for the economy as well as overcoming pressure on the Swiss franc.
Meanwhile, the SNB also raised its forecast for inflation which is expected to increase to 0.4% in 2021, and 0.6% in 2022 and 2023.
Meanwhile, the central bank also expects strong Swiss economic growth in the second quarter. Gross Domestic Product (GDP) is forecast to increase by around 3.5% for 2021.
Given that there was nothing surprising in the aftermath of the SNB’s decision, other than a rising projection, the U.S. dollar continued to appreciate higher against the Swiss franc.
In contrast to the SNB, the Federal Reserve (Fed) has given indications for a faster -than -expected interest rate hike. This has supported US dollar trading to rise to a nearly one -month high against the Swiss franc.
