SNB and BoE rate decisions are the remaining focuses of the day. SNB is widely expected to rise interest rate by 75bps to 0.50%, back in positive region. There are some speculations of a larger hike, but it’s unlikely. The central would also repeat that appreciation of the Swiss Franc is welcome for now, as it helps curb imported inflation.
Meanwhile, BoE is expected to deliver another 50bps hike to 2.25%. The UK economy is stuck between a rock and a hard place. While inflation appeared to be slowing, “slightly”, it remained close to multi-decade high. On the other hand, weakness has been seen in spending while the economy is already in recession. The voting of today’s decision could contain some surprises.
Some previews on SNB and BoE:
- SNB Could Surprise (Again) with a Larger than Expected Hike
- Will the SNB Rock the Swissie with a Huge 100 bps Rate Hike?
- BoE Preview: Pressure Mounts for a Jumbo Hike
- BoE Decision a Close Call to Speed Up Rate Hikes as Worries Mount
GBP/CHF broke through pandemic low at 1.1107 earlier this month, and the down trend is still in acceleration mode. Near term outlook will stay bearish as long as 1.1056 resistance holds. Next target is 200% projection of 1.3070 to 1.2134 from 1.2598 at 1.0726.
There is risk of further downside acceleration, either on dovish BoE or deterioration in geopolitical risks. In that case, break of 1.0726 could pave the way to 1.0148.
