Which policy will SNB follow? The ECB or Scandinavian central banks?
The central bank may pay a lot for its passive approach. The market no longer reacts to the SNB claims that the franc is overvalued or that it may use currency interventions. Investors need real actions. The discussion of the central bank’s officials about the necessity of a fixed interest rates spread with the euro area and a 10-bps rate cut by Denmark’s central bank following the ECB easing suggested that further policy easing was on the way. The SNB hasd kept rates on hold, encouraging the EUR/CHF bears…
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