Explore eFXplus Derived Data That Drive Results
A Data Partner of:
Mar 22 - 02:55 PM

Danske: SNB's Rate Cut Sets Stage for EUR/CHF Uptrend

By eFXdata  —  Mar 22 - 01:20 PM


Danske Bank discusses the Swiss National Bank's (SNB) recent decision to cut its key policy rate by 25 basis points to 1.50%, marking the initiation of its cutting cycle and positioning it as the first G10 central bank to lower rates this cycle. The unexpected move, with markets pricing in only 7bp for the meeting, spurred a jump in EUR/CHF. The SNB cited reduced inflationary pressures and the real-term appreciation of the Swiss Franc (CHF) over the past year as key factors behind its decision. Additionally, the SNB revised its inflation forecast downwards, signaling a softer inflation outlook.

Key Points:

  • First G10 Rate Cut: The SNB's rate reduction has surprised the market, leading to a significant reaction in EUR/CHF.
  • Inflation Forecast Adjustment: The SNB's updated inflation forecast indicates lower expected inflation rates, with a constant policy rate of 1.50%.
  • FX Intervention Stance: While SNB President Jordan mentioned FX intervention as a monetary policy tool, he indicated no current preference for selling or buying foreign currency, suggesting a hold stance on buying foreign currency for now.
  • Future Rate Cuts: Danske predicts the SNB will continue with quarterly 25bp rate cuts throughout the year, bringing the policy rate down to 0.75% by the end of the year.


The SNB's surprise rate cut and its implications for inflation forecasts and FX intervention policy point towards a near-term uptrend in EUR/CHF. Despite the immediate market reaction, Danske maintains its expectation for continued rate reductions by the SNB, projecting a gradual decline in the policy rate to 0.75% by year-end. This week's decision underscores a strategic shift that could facilitate a higher EUR/CHF in the forthcoming period.

Danske Research/Market Commentary


  • eFXplus
  • End-user license agreement (EULA)


  • About
  • Contact Us


  • Terms of Service
  • Privacy Policy
  • Disclaimer
© 2024 eFXdata · All Rights Reserved