The Swiss Franc weakened to approximately 0.89 per USD, its lowest level since November 22, after the Swiss National Bank (SNB) announced a larger-than-expected 50 basis point cut to its key interest rate.
Swiss franc at near three-week low
This was the SNB's most significant rate reduction in nearly a decade, surpassing the consensus forecast of a 25 basis point cut. While surprising to some, other analysts had predicted the 50 basis point move as a proactive step to boost economic growth amid subdued inflation. The decision follows a further easing of "underlying inflationary pressure" this quarter, with annual inflation declining from 1.1% in August to 0.7% in November, remaining within the SNB’s target range of 0-2%.
Inflation expected down
Inflation is projected to decrease further next year. Meanwhile, real GDP growth was sluggish in the third quarter, as expected.
