Credit Agricole previews the Swiss National Bank decision
The SNB decision is at 0730 GMT on Wednesday. Credit Agricole anticipates Swiss franc weakness on hints of more aggressive policy.
"This week's main focus will be on the SNB monetary policy announcement. Given low inflation risk the central bank remains in a position to keep an aggressive monetary policy stance. This is especially true as the overvalued franc is keeping monetary conditions tight, regardless of somewhat more stable growth conditions.
At the same time, however, it must still be considered that an even more aggressive policy stance seems unlikely unless the CHF appreciates more considerably from current levels.
This in turn suggests that external drivers such as global risk sentiment should continue to be the franc's main driver.
From that angle this week's Fed monetary policy announcement should be key. Even if the Fed refrains from tightening monetary policy as soon as this week, they should communicate a higher probability for doing so in October. As such risk sentiment is likely to remain unstable.
If anything we see further CHF downside versus the USD."
For more from major banks, check out eFX Plus.
