Franc Flat-to-Higher Despite Downgrade of SNB Inflation Forecast

The Swiss franc was relatively strong today, trading flat against some currencies while gaining versus others. That was surprising, considering that the central bank left interest rates in the negative territory and lowered inflation projections.
The Swiss National Bank kept borrowing costs unchanged at today’s policy meeting, with the interest on sight deposits remaining at -0.75% and the target range for the three-month Libor staying at between –1.25% and â€“0.25%. The central bank reiterated that it is ready to intervene in the currency market if necessary:

The SNB will remain active in the foreign exchange market as necessary, while taking the overall currency situation into consideration.

The SNB kept its inflation forecast for 2018 at 0.9%, but reduced the projections for 2019 from 0.8% to 0.5% and for 2020 from 1.2% to 1.0%.
USD/CHF was at 0.9938 as of 16:26 GMT today, trading close to its opening level of 0.9934. CHF/JPY rallied from 114.01 to 114.40.

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