The Swiss national Bank (SNB) is coming under increasing pressure. In the light of the corona crisis, and the increasingly weakening of the global economy and the price war of the two oil producing countries Russia and Saudi Arabia, the Swiss franc is gaining as a safe harbour in value. Finally, the SNB may have to intervene increasingly in the currency market.

The Swiss franc is currently trading at a price of 1,0579 francs, at times, he fell on 1,05435. Also, the Dollar has devalued against the Swiss franc on 0,9256 franc massif, in the Deep, there were only 0,9183. Thus, the Swiss franc is so strong since the middle of 2015, shortly after the SNB removed the Euro minimum exchange rate.

Recently, the SNB has placed on purchases of foreign currencies, in order to keep the appreciation of the Swiss franc in check, as experts say. Especially in the past three weeks, this is likely to be the case. This is the increase in sight deposits by a total of 8.4 billion shows.

The development of sight deposits is considered to be an indicator of whether the SNB intervened in the foreign exchange market. The Central Bank buys foreign currencies and credits the banks with the corresponding Swiss francs amount on its SNB account. According to Raiffeisenbank Switzerland, the SNB is likely to continue with selective interventions to continue. "As long as the ECB does not 'overreacted', and the Euro exchange rate does not return to continue the journey to the bottom," says Alexander Koch.

When other Central banks, go ahead, but could also be further interest rate cuts, a theme. After the US Central Bank, the Fed has taken in the past week, and the benchmark interest rate by half a percentage point cut is expected in Europe, a Tightening of the Central banks. The ECB will publish the interest rate decision on Thursday and the SNB monetary policy assessment a week later.

"must be The SNB if the ECB lowers on Thursday the key interest rate (from -0,50% on -0,60%), otherwise, the interest rate differential to the Euro area is too small," said Daniel Hartmann, chief economist of the Zug-based Bantleon Bank. The SNB is likely to reduce in a kind of liberation the key interest rate by 25 basis points (BP) on -1,00 percent. "We think that the SNB will act, with interventions and, ultimately, a reduction in interest rates range from -0.75 to -1.0 percent," said Alessandro Bee, chief investment strategist at the Global Wealth Management of UBS. (sda)

Created: 09.03.2020, 16:46 PM