We expect the SNB to keep its policy settings unchanged at its September meeting (Thursday) including its policy rate at -0.75%, the target range for the three-month Libor at -1.25/-0.25% and the exemption from negative deposit rates it gives on the majority of domestic banks’ reserves.
Subdued market volatility since Brexit, has implied a c.1.6% CHF REER depreciation, which in addition to a modest improvement in Swiss data, should keep the SNB comfortably on hold, in our view. Reduced pressure for the SNB to act can also be implied by the decline in our estimates of FX intervention since June (Figure 5).
We expect the policy announcement to be neutral for EURCHF.
Copyright © 2016 Barclays Capital, eFXnews™Original Article
