- Monetary tightening has strengthened Swiss franc
- Still, underlying inflation pressure has risen further
- There is a danger inflation may become entrenched above 2%
- Inflation caused by higher rents not a reason to refrain from future rate hikes
They are certainly keeping the door open for higher rates and the remarks are making that evidently clear. Maechler is also chiming in with some comments as per below:
- SNB has sold foreign currencies in recent quarters
- Will continue that if this is appropriate for monetary policy
- Remain ready to buy foreign currencies if there is excessive franc appreciation
In terms of FX market activity, the first thing we will see when the SNB switches back to the other side of the road will be to label the franc as "expensive" or "highly valued" again.
