Will SNB decision stem Swiss franc’s slide?

The Swiss franc is down slightly in the Wednesday session, after sustaining sharp losses a day earlier. Currently, USD/CHF is trading at 0.9350, up 0.12% on the day.

Swiss franc takes a tumble

The Swiss franc continues to lose ground to the US dollar, and fell 1.15% on Tuesday, its sharpest one-day drop since November 2020. It’s been a rough March for the Swissie, which is down 2.90% this month. The currency’s decline is putting on some smiles on the faces of officials at the Swiss National Bank (SNB), who prefer a weaker franc in order to protect the Swiss export economy. The problem is that the rest of the world is attracted to the stability of Switzerland, which makes the Swiss currency an attractive asset for global investors.

SNB decision looms

The SNB holds its monthly policy meeting on Thursday (8:30 GMT) and the bank is widely expected to maintain interest rates at -0.75%, which are the lowest in the world. Investors will be attentive to the SNB Monetary Policy Assessment, which will provide some clues about how policymakers view the Swiss economy. The bank spent some 110 billion francs in 2020 to curb the appreciation of the Swiss franc, and was labeled a currency manipulator by the US Treasury Department for its efforts. Any references to the central bank’s intervention in the currency markets could move the Swiss franc on Thursday.

In the US, today’s economic releases were a mixed bag. The manufacturing sector remains a bright spot, and Manufacturing PMI rose slightly to 59.0, up from 58.5 and within expectations. However, durable goods orders underperformed badly, coming in at -1.1%. This was down from 3.4% beforehand and the first decline since April, during the severe downturn caused by Covid-19.

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USD/CHF Technical

• USD/CHF faces resistance at 0.9337. This is followed by resistance at 0.9381
• 0.9231 has been a strong support level since mid-March. Below, there is support at 0.9169

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