Swiss National Bank rate cut has undermined the CHF, demoted to funding currency of choice

ICYMI, presenting the Swiss National Bank rate cut:

• ForexLive European FX news wrap: Swiss franc falls as SNB surprises with rate cut

I had the heads up on this during APAC hours on Thursday, giving an assessment of a 30% chance of a cut:

• Swiss National Bank policy decision due Thursday, 21 March 2024 - preview

HSBC analysts response is a good oneSwissy ahead:

• “The CHF has already been an underperformer this year and is now likely to extend this underperformance. Being the first G-10 central bank to cut will undermine the currency for a carry perspective with the CHF likely to be increasingly seen as a funding currency of choice in a world of low FX volatility.
• The language on the currency by the SNB was neutral, with the central bank “willing to be active” in the FX market if necessary. We believe the SNB has taken a more neutral stance in FX policy in recent months, rather than actively seeking a weaker currency. This stance may be challenged in the months ahead with the CHF now weakening in real terms, but this is unlikely to provide an impediment to CHF weakness for now.”

Greg's technical analysis is here:

• EURCHF is looking to extend above its 100-week MA