The Swiss National Bank (SNB) has maintained its key interest rate at 0.00%, as widely anticipated in December’s policy meeting. Alongside this decision, the SNB slightly downgraded its inflation forecasts for 2026 and 2027, while upgrading the economic outlook. The improvement in economic prospects is attributed to the recent reduction of US tariffs on Swiss goods to 15%, providing a positive boost to trade conditions.
SNB Chairman Thomas Schlegel addressed the disappointing inflation figures reported in recent months, emphasising that the central bank expects inflation to rise gradually over the next quarters. This slow inflation pickup is expected to be supported by ongoing expansionary monetary and fiscal policies.
Following the SNB announcement and press conference, the Swiss Franc (CHF) remained largely stable. However, broader weakness in the US dollar (USD) allowed USD/CHF to slip below a key support level around 0.7980, signalling some renewed momentum in the CHF.
In the wider market, the US dollar continues to lose ground after Federal Reserve Chair Jerome Powell’s recent dovish comments. Powell downplayed inflation risks and placed more focus on the strength of the US labour market. US equities, which had retraced their post-FOMC gains overnight, are staging a partial recovery. Meanwhile, US Treasury yields hover near their daily lows, bolstering safe-haven metals such as gold and silver.
Today’s main event for traders will be the release of US Jobless Claims data. Initial claims are forecast at 220,000, up from the previous 191,000, while continuing claims are expected to rise slightly to 1,947,000 from 1,939,000. This data reflects an atypical labour market described by Powell as “low firing, low hiring.” The Federal Reserve aims to encourage a shift towards “low firing, higher hiring” without triggering inflation.
Forex traders should watch how these evolving monetary policies and labour market dynamics influence currency movements, particularly the USD and CHF, to better position themselves ahead of upcoming data releases.
Original Source: Giuseppe Dellamotta of investinglive.com
