FXStreet (Łódź) - Julien Manceaux from ING believes that the press release and comments from SNB, following their decision to keep monetary policy on hold, suggest that the central bank is on alert again.
"If the SNB still describes a minimum exchange rate as being 'the right tool for ensuring appropriate monetary conditions in Switzerland', it also acknowledged more pressure on the national currency: the sentence 'we stand ready to act with the utmost determination' which was dropped in June last year reappeared this morning. In the past, it signaled imminent interventions."
"Further SNB action on the FX market cannot be excluded before the end of the year, but given the current size of the SNB balance sheet, we doubt that 2010-like operations can be within reach. If the pressure was to be too high, the SNB would have to turn to other kind of instruments."
"What is certain is that expectations of an early end to the floor under the Franc have been killed by the ECB announcement. We reiterate our opinion that the floor will be maintained until at least the end of 2016."
"The SNB inflation forecast shows that deflationary pressures will only abate in 2016. We continue to think that this will allow the SNB to follow other central banks in tightening monetary policy through interest rate hikes only then."
"All in all, the SNB will continue maintaining a zero interest rate policy while fighting the domestic imbalances that this creates through macro-prudential policies. It will also continue to ensure a minimum exchange rate under the CHF, with further interventions being possible later this year."
"We currently expect no change in the exchange rate policy before late 2016 and in the interest rate policy before early 2016."