The Swiss franc was little changed against the US dollar and the euro early on Tuesday in the run up to a widely expected rate rise by the Swiss National Bank on Thursday.
The franc was hovering just below a one-month low reached one day earlier, trading at 1.2344 per dollar, unchanged from the previous close. Against the euro the franc changed hands at 1.5522 per euro, also virtually flat on the day.
Analysts at Commerzbank expect the franc to hold below key resistance at 1.5650 per euro.
"We still look for a move back to initially 1.5555 and ultimately slightly longer term towards the 1.5450/55," the bank said in a research note.
The Swiss National Bank is nearly certain to increase interest rates a quarter percentage point on Thursday, economists say, and only a major shock to the global economy will keep it from raising borrowing costs further.
Switzerland's central bank tightened credit last December and in March as the economy has grown healthily, but analysts say there is no pressure for it to dash into action because inflation remains benign and is picking up from only low levels.
Following the March increase the SNB has a target band for the three-month Swiss franc LIBOR rate of 0.75-1.75 percent, aiming for the mid-point of 1.25 percent.
All 19 economists in a Reuters poll last week predicted that the SNB will raise its the mid point to 1.50 percent on Thursday and the median expectation was for further 25 basis point rate rises at the quarterly meetings in September and December.
The European Central Bank raised interest rates by 25 bps to 2.75 percent last week.
Comments
Comments are closed.