Another Rate Hike Expected From The SNB Despite Fed Pause, Which Way For USD/CHF?

The Swiss National Bank (SNB) Policy rate is due to be released on 22nd June at 11:30 AM GMT+4 (Dubai time). The market expects an interest rate hike from 1.50% to a forecasted 1.75%.


Considering the potential impacts of this expected rise, let’s look at the following figures.




Figure 1: Swiss National Bank Historical Policy Rate,



The policy rate in Switzerland provides details regarding the determined interest rate by the Swiss National Bank from March 24, 2022 to March 2023 (Figure 1).


The data shows a constant upward trend in interest rates starting from -0.75% in March 24, 2022, gradually progressing to 1.50% by March 23, 2023.


Now let’s discuss how previous interest rate decisions have affected the USD/CHF currency pair:




Figure 2: USD/CHF currency pair % change in price, 30min timeframe,



The USD/CHF currency pair percentage change in price provides insights into the 30-minute time frame movements following the announcement of Switzerland’s policy rate (Figure 2).


We see that from June 16, 2022, to December 15, 2023, the USD/CHF pair witnessed a rise following the announcement of the SNB’S decision to increase rates (Figure 2).


On September 22, 2022, the price of the USD/CHF pair rose by 1.65%, marking a higher benchmark for the previous monetary decisions (Figure 2). This movement explains the battle held between the aggressiveness of the Federal Reserve compared to the SNB, whereby despite a rise of 0.50% in Switzerland we witnessed a rise of 0.75% in the U.S.


Consequently, the increase in value of the Swiss franc was not able to reach that of the U.S. Dollar, which led to this 1.65% increase (Figure 2).


However, on March 23rd, 2023, we can see that the USD/CHF pair declined by -0.25% (Figure 2). In fact, on Wednesday 22nd March, the Fed decided to increase interest rates by 0.25%, which was lower than the 0.50% policy rate increase of the SNB (Figure 1). This difference in interest rates explains the 0.25% drop in the USD/CHF pair, which was due to the appreciation of the CHF compared to the U.S Dollar.


Following this trend, should we expect the Swiss National Bank (SNB) to meet analysts’ expectations of a 25-bps rise? Consequently, will the USD/CHF pair move accordingly after the Fed decided to pause on rates.





The content published above has been prepared by CFI for informational purposes only and should not be considered as investment advice.  Any view expressed does not constitute a personal recommendation or solicitation to buy or sell.  The information provided does not have regard to the specific investment objectives, financial situation, and needs of any specific person who may receive it, and is not held out as independent investment research and may have been acted upon by persons connected with CFI.  Market data is derived from independent sources believed to be reliable, however, CFI makes no guarantee of its accuracy or completeness, and accepts no responsibility for any consequence of its use by recipients.