SNB Hold on Policy Rate May Boost USD/CHF Ahead

Analysts at ING have highlighted a recent Bloomberg source story suggesting that the Swiss National Bank (SNB) may keep its policy rate at 0.00% until the end of 2027, in line with their own forecast.

This view entrenches underperformance for the Swiss Franc (CHF) in rising global rate environments and supports using USD/CHF to express hawkish Federal Reserve views, according to ING's Chris Turner.

The SNB has yet to comment on the report, which may be true, but if confirmed it would mean that investors funding their carry trades out of Swiss Francs rather than the Yen could find cheaper alternatives.

ING argues that USD/CHF could reach 0.85 in August if the Fed hikes its rates, making it a popular vehicle for expressing hawkish views.