USD/CHF drops further

FXStreet (Córdoba) - The Swiss franc is having the best day in month against the US dollar and has erased most of yesterday’s losses. During the European session the decision of the Swiss National Bank (SNB) to leave rates unchanged boosted the swissy and on American hours, Greenback pulled back across the board.

USD/CHF recently fell to 0.9330, new daily low and currently trades at 0.9345/50, around the same level it had before the FOMC statement released yesterday.

SNB holds: negative rates not an option?

The swissy gained momentum after the SNB left rates unchanged and made no extraordinary announcements. According to Emile Cardon, Strategist at Rabobank, the introduction of negative rates on deposits “is a bridge too far”, doubting about the effectiveness of the instrument.

“One of our arguments is that a few banks have already introduced negative rates for their clients. The impact on the EUR/CHF was limited. So, why would the introduction of negative interest rates on sight deposits have much impact?”, concluded Cardon.