SNB gets some breathing room from ECB's modest policy moves

ZURICH (Reuters) - The Swiss National Bank holds its quarterly policy assessment review on Thursday with the market split on whether it will act again to hold down what it calls a significantly overvalued Swiss franc.

Before the European Central Bank met last week, most economists polled by Reuters had forecast the SNB would leave rates unchanged. A third, wary that more easing by the ECB would boost the franc, expected the SNB to cut three-month Swiss Libor and its record-low -0.75 percent sight deposit rates as much as 25 basis points.

In the event, the ECB extended but did not expand asset purchases and cut the deposit rate a modest 10 basis points to -0.30 percent, and some economists previously expecting a Swiss rate cut now say action is unlikely.

"Prior to the ECB, we had anticipated that the SNB would come out with both guns blazing to defend the franc," said Peter Rosenstrich, head of market strategy at Swissquote. "However, the less dovish {ECB President Mario] Draghi suggests the debasement of the euro is on pause and therefore threat to the franc is limited."

The SNB historically has moved in quarter-point steps and tends to keep the sight deposit rate at the middle of its target range for three-month Libor, now at -1.25 to -0.25 percent.

The decision is due at 0830 GMT (0330 EDT) followed by a news conference at 0900 GMT (0400 EDT).

(Reporting by Brenna Hughes Neghaiwi, Larry King)

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Deutsche Bank calls Treasury buyback doubling similar to ’operation twist’
• Trading Day: Bessent makes his mark 
• Ukrainian capital Kyiv under attack by Russian ballistic missiles, mayor says