Last Thursday, members of the Swiss National Bank (SNB) board decided to lower the Sight Deposit Rate benchmark interest rate by 25 basis points (bp) from 1.50% to 1.25%.
Analysts had previously anticipated this 25 basis point reduction and projected the possibility that the SnB would lower interest rates after the SNB lowered interest rates previously in March.
The SNB's decision reflects the response of central bank officials to economic indicators, and low inflation pressures compared to the previous quarter. Due to this decrease in interest rates, CHF experienced a drastic price spike, such as CHFJPY suddenly falling after several bullish weeks. EURCHF suddenly rose after several weeks of bearish tendencies. And USDCHF suddenly rose after several days of bearish tendencies.
Meanwhile, the price of WTI oil appears to have risen from a low of 80.27 to a high of 81.34 yesterday. However, the rise in oil prices may have been driven more by tensions in the Middle East than by the SNB's decision. According to the newspaper Israel will withdraw from Rafah and will go to all-out war with Lebanon's Hezbollah. On the other hand, rising oil prices were buoyed by yesterday's US jobs data, and lower unemployment claims even though all indications show that the US employment market is still weak.
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Analysts had previously anticipated this 25 basis point reduction and projected the possibility that the SnB would lower interest rates after the SNB lowered interest rates previously in March.
The SNB's decision reflects the response of central bank officials to economic indicators, and low inflation pressures compared to the previous quarter. Due to this decrease in interest rates, CHF experienced a drastic price spike, such as CHFJPY suddenly falling after several bullish weeks. EURCHF suddenly rose after several weeks of bearish tendencies. And USDCHF suddenly rose after several days of bearish tendencies.
Meanwhile, the price of WTI oil appears to have risen from a low of 80.27 to a high of 81.34 yesterday. However, the rise in oil prices may have been driven more by tensions in the Middle East than by the SNB's decision. According to the newspaper Israel will withdraw from Rafah and will go to all-out war with Lebanon's Hezbollah. On the other hand, rising oil prices were buoyed by yesterday's US jobs data, and lower unemployment claims even though all indications show that the US employment market is still weak.
View attachment 7128
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