The Swiss National Bank's aggressive 50 basis point interest rate cut to 0.5% may help to keep EUR/CHF above the key 0.9200 support level through next month's 10th anniversary of the "Frankenshock".

The safe-haven franc weakened against the euro and dollar following the SNB's half-point rate reduction, when a 25 bps cut was the consensus forecast, with EUR/CHF jumping to threaten 0.9350.

The cross was last at 0.9350 on Nov.
25, after the franc was negatively impacted by SNB Chairman Martin Schlegel mooting the possibility of negative Swiss interest rates hours after EUR/CHF dropped to threaten 0.9200 for the second time this year.

If EUR/CHF drops back towards 0.9200 in the new year, it could raise the risk of the SNB cutting rates by another 50 bps to zero at its next meeting in March.

EUR/CHF was last at or below 0.9200 on Jan.
15, 2015, when it plumbed its all-time EBS low of 0.85 after the SNB's unexpected decision to scrap its 1.20 minimum exchange rate.

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