top of page

Forex

17/06/22, 06:40

Smiling Young Businessman

Kenny Fisher

MarketPulse

I am a Currency Analyst at MarketPulse. I write a daily column about forex economic calendar events and political developments affecting the foreign exchange market, with a focus on fundamental analysis. I began my career in forex at Bendix Foreign Exchange in Toronto, where I worked as a Corporate Account Manager for over seven years. In addition to my background in forex, Kenny brings to MarketPulse his extensive experience as an editor and writer.

Swiss Franc Soars After SNB Surprise Hike

The Swiss franc posted massive gains after the Swiss National Bank raised interest rates by 0.50%.

It has been a week of central bank drama, which started with the Federal Reserve delivering a massive 0.75% rate hike. This was followed today by a Swiss shocker, as the SNB tightened the screws on monetary policy with its first-rate increase since 2007, raising rates from -0.75% to -0.25%. The markets had become accustomed to the SNB’s ultra-low rate of -0.75%, which had been in place since 2015.


Most major central banks, with the notable exception of the Bank of Japan, are in the midst of a rate tightening cycle, as they attempt to wrestle down surging inflation. After the rate hike, SNB Chairman Thomas Jordan said that the SNB was concerned about rising inflation in Switzerland, which is heading towards 3%. The rate statement reflected Jordan’s comments, saying that further hikes could be implemented in order to stabilize inflation.


The statement also reiterated that the SNB would be “willing to be active in the foreign exchange market as necessary.” The SNB carefully monitors the exchange rate and has intervened in the past when it deemed the Swiss franc’s value as too high, which is detrimental to Switzerland’s export-reliant economy. The Swiss franc has been on a slide, falling 400 points and breaking above parity earlier this week. The SNB may have felt that this was a prudent time to deliver a significant rate hike, even though it would send the Swiss franc sharply higher.


Federal Reserve delivers 75-bp salvo

There were no surprises from the Federal Reserve, which raised rates by 0.75%, to a target range of 1.50-1.75%. The Fed downgraded its US growth forecasts for 2022 and 2023, but insisted that there would be no recession. Some analysts would beg to disagree, but the financial markets were relieved, as Fed Chair Powell said he didn’t expect 0.75% rate hikes to become common. This is a massive rate hike, the largest since 1994. Will it hasten the long-sought-after inflation peak? Along with the Fed, we’ll have to be patient and wait.



USD/CHF Technical

  • USD/CHF has broken through support at 0.9928 and 0.9792. The pair is testing support at 0.9698, with 0.9500 the next support line

  • There is resistance at 1.0084

Long-time Chief Executive Officer Ben Silbermann of Pinterest would step down, handing over the reins of the social media platform to Google...

Stock Market

Google executive to take over as a new CEO of Pinterest

Top accounting firm Ernst & Young has been slammed with a record $100 million fine from the US government...

Stock Market

Accounting firm gets 100 million fine for faulty regulations

The Indian rupee slipped into a fresh low today and extended losses against the US dollar.

Forex

The rupee tumbled to a new low against the dollar in the midst of an increase in crude oil price

Wall Street saw a sharp fall at its closing in a broad sell-off. Consumers' worries over recession have sparked up...

Stock Market

Wall Street Lose Balance after recession strikes growth fear among consumers’

Soaring inflation may be pushing the US economy into a deep recession. Last week's 0.75% interest rate hike by the Federal Reserve...

Stock Market

Inflation ringing the recession bell - Mohammed Shaheen

bottom of page