SNB's Jordan sounded hawkish yesterday

USD/CHF Remains Bearish on Further SNB Hikes

Posted Friday, March 24, 2023 by
Skerdian Meta • 2 min read

USD/CHF turned bearish in early March as the SVB bank filed in the US, but then surged 200 pips higher as the Swiss Credit bank failed in Switzerland. But the measures taken by authorities have had a positive effect on the financial markets, with European stock markets stabilizing and UBS and Credit Suisse shares rebounding after the takeover.

However, the collapse of Credit Suisse shook the investor confidence and dealt a blow to the reputation of the Swiss banking system. The CHF which has traditionally been seen as a safe-haven asset, has lost ground against the US dollar and the euro, suggesting that investors may be losing faith in its safety, although the weakness in the USD is keeping this pair bearish nonetheless. Overall, it appears that the financial markets are still volatile and unpredictable, and investors and policymakers alike must remain vigilant in the face of uncertainty.

Although the CHF is expected to maintain its value as the Swiss National Bank (SNB) let the markets know its plans to continue raising interest rates. The SNB hiked rates by 50 basis points to 1.5% yesterday, and has stated that additional increases may be necessary to maintain price stability over the medium term.

USD/CHF Daily Chart – Heading for the Bottom

Sellers keep the pressure to the downside 

The decision to raise interest rates was driven by concerns over inflationary pressures, which the SNB believes have re-emerged again recently. Despite the recent turmoil in the Swiss banking sector, the SNB didn’t take it too much into account in its decision to raise interest rates, which demonstrates the central bank’s commitment to maintaining price stability. This suggests that the CHF may continue to be viewed as a safe-haven asset, with investors relying on the SNB’s policies to support its. USD/CHF has been bearish this week and is heading toward the support zone above 0.90.

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