ECB likely took the pressure off from SNB

The Swiss National Bank (SNB) maintains its expansionary monetary policy. The target range for 3-month Libor remains at between -1.25% and -0.25%, and the interest rate on sight deposits with the SNB is kept unchanged at -0.75%

ECB has taken off pressure from SNB, by surprising FX markets, not making its monetary policy more accommodative. By this policy action, ECB took the downside pressure off EUR/CHF.

The likelihood of ECB extending its QE volume has now fallen considerably. Further small lowering of depo rate will only have minimum impact on Euro exchange rates as the ECB will not get notably more expansionary in FX market view.

SNB is not fully away from the hook, as the problem of deflation stays in place. EUR/CHF is currently trading at 1.0827, while USD/CHF is trading at 0.9845.