The Swiss franc rallied against its major peers on Thursday after the U.S. Fed verdict regarding easing policy.
The swiss currency is on track to post its biggest daily jump versus the greenback in a month after the Swiss National Bank declined to match the ECB. The SNB kept its policy rate unchanged at -0.75%. SNB maintained the rate it charges on the excess cash it holds for commercial banks at -0.75%, though it raised the threshold at which the negative rate charges kick in.
The U.S. Federal Reserve’s second interest rate cut of the year and promises of support from other top central banks kept global recession jitters at bay.
The effects of the trade war have seen monetary policy swing back into support mode this year. But, the Fed’s central message on Wednesday was that it wasn’t expecting a major capitulation of the economy.
The franc jumped 0.5% against the greenback to $0.9908. The swiss currency rallied more than 1% versus the Australian dollar, a currency pair typically favoured by hedge funds.
The Bank of Japan kept monetary policy steady – as expected – and signalled the chance of expanding stimulus as early as its next policy meeting in October.
The BoE is forecast to keep rates on hold at 0.75% when it announces its policy at 1100 GMT. Investors will be watching closely for policymakers’ views on Brexit and the outlook for the British economy.
START TRADINGForex – Rally for the Swiss franc after Fed verdict
Japan and Switzerland kept their deeply negative interest rates on hold.
The dollar struggled to move higher despite the Federal Reserve offering mixed signals about the path for further easing. The greenback struggled to gain despite a more hawkish than forecast tone from Wednesday’s Federal Reserve meeting.
The Japanese yen held on to earlier gains after the Bank of Japan kept interest rates on hold. The yen rose to as high as 107.79 yen per dollar before settling at 108.06, up 0.4% on the day.
The Australian dollar had its worst day in a month as expectations for more central bank rate cuts leapt after joblessness hit a one-year high. The Aussie dropped 0.7% to a two-week low of $0.6782.
Sterling steadied on Thursday as traders waited for retail sales numbers and the Bank of England monetary policy meeting due later. Sterling was unchanged at $1.2469, while against the euro the currency was down marginally at 88.535 pence.
Oil prices rose sharply, supported by supply risks as the market assesses the fallout from last weekend’s drone attacks on Saudi oil infrastructure. Brent crude futures gained $1.78 to $65.38 a barrel by 1219 GMT. U.S. WTI crude was up $1.28 at $59.39 a barrel.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money