Swiss National Bank Vice President Jean-Pierre Danthine said that the central bank will drop the currency cap when it starts raising interest rates. Such comments could have boosted the Swiss franc if not the fact that the SNB is not going to lift rates in the foreseeable future.
Danthine said:
The day the SNB decides to raise rates, there can no longer be a restricting minimum exchange rate. Today the absolute priority is the cap, which we will keep in place as long as necessary.
The Swissie rallied initially as the end to the franc’s ceiling was mentioned, but dropped later when traders realized that the SNB will not change its policy anytime soon.
USD/CHF was up from 0.9237 to 0.9274 as of 12:44 GMT today after falling to 0.9215 earlier. EUR/CHF advanced from 1.2304 to 1.2323, following the decline to 1.2294 intraday.
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