Swiss National Bank Interest Rate Decision - March 15, 2007

Has anyone watched CHF after these interest rate decisions in the past?

Being a quarterly release, and that the Franc is suffering downward pressure due to its low interest rates (second only to the Yen), and that there are expectations they are rising by 25 basis points, I think there will some be some good volatility...

Also if anyone comes across any articles about it, post them here.

I found these:
http://www.ft.com/cms/s/1ecc91e6-c26...b5df10621.html
http://www.fxstreet.com/news/forex-n...e-328703947806
http://www.economist.com/countries/S...conomic%20Data
http://www.bloomberg.com/apps/news?p...X2Y&refer=home

And this elsewhere on the forums:
http://forexfactory.com/showthread.php?t=19562

Based across everything I've seen, the opinion about what the SNB will ultimately do seems divided... not much in the way of hard data either...

Here's another article I found:
http://english.people.com.cn/200703/...09_355827.html

One general answer would be ..

As long as there is no inflationary pressure SNB is poised to keep rates on hold.

I think your question points towards expected volatility on the day of the decision, well ...

Switzerland is still quite an important country when it comes to lending and borrowing money, therefore low benchmark rates attract borrowers, therefore Banks earn more, government has to pay less on governmental debt and so forth .. to keep it very simple.

The Swissy together with the Yen form the two major players in the the carry trade business, the Yen more, the Swissy less, saying this indicates, that if carry trades one day should start to unwind, Swissy could rise pretty rapidly

BUT

I. Swissy is behaving very similar to the Euro, so in Order for the USD/CHF Cross to rise, we need a weaker Euro.

II. If BoJ finally feels confident to adjust benchmark rates, this could cause an overflow of money that could be redirected into the Swiss Franc since investors tend to believe that it behaves more stable and thus bares less risks for the carry traders.

I think the possibility of a rate hike is already priced in, so I would expect the reactions to be rather weak, especially since traders don't pay much attention for swiss data BUT have a look at CHF/EUR

If I am not mistaken, there is no fixed time for the release so it is not possible to trade that news .. but that I am not sure of.

Just my 2 Cents

Juao

Two more good articles about this:
http://www.dailyfx.com/story/strateg...894631524.html
http://www.financialnews-us.com/?pag...tid=1047245754

This may be my best trade yet (or worse lol!).

Another article
http://www.dailyfx.com/story/dailyfx...917571109.html

Good analysis on this one!

if the rate is increased as expected it usually moves AGAINST the currency. worse if it is left unchanged. IF it is raised by more then it is good

hmm, take it from this way...the best option how to trade this is waiting for not raising interests, it means when the interest stay unchanged it's good signal for selling CHF...

HAha!! This is too funny.
I was reading conflicting times about when this release was happening, but I thought it was 4:30 EST... So I established my position, and this is as good as I could have asked for on the actual news release!

Oh well, I'm coming back when they actually do release it because I want to make some more money!

I am sure that a rise in rates will also have a dramatic effect being that it was rescheduled.

yeah, i think interest are always a big mover, but i havent traded CHF at all, i dont know how many pips it goes when they raise.

hmm, nothing interesting happend, i was looking at all pairs...max 20 pips, i was short on EUR/CHF ...and now we can see retracement on all pairs

It was the press conference that drove the market. I need some sleep.

Everything that happened, was expected and priced in before.

We will not see much movement in future, as SNB will not likely raise interest rate more often than ECB ( ECB should be raising two more times to 4.25% ) so the gap will not narrow, therefore carry trades should stay intact until next year ( based on CHF - IF NOTHING CHANGES -)

just my 2 cents

/Juao