The Swiss National Bank (SNB) has begun to reduce interest rates.

The Swiss franc has been depreciating continuously in April, marking the sharpest depreciation in 5 months. This comes amidst diverging monetary policy perspectives between the Swiss National Bank and the Federal Reserve. Apart from lowering interest rates, the SNB has also significantly reduced the inflation rate trend. Despite receiving government support, the Swiss economy is facing pressures.

In its latest meeting, the Swiss National Bank reduced its policy interest rate by 25 basis points to 1.5%. This marks the first rate cut in 9 years and is significant as the SNB is one of the major central banks to ease monetary policy. This rate cut follows a decrease in Swiss inflation to 1.2% in February, the ninth consecutive month within the SNB's 0-2% target range, indicating stability in inflation.

The central bank noted that this rate cut reflects concerns about deflationary pressures. Additionally, the strengthening of the Swiss franc in the past year led policymakers to anticipate inflation returning to stability in the coming years. The SNB forecasts an average inflation rate of 1.4% for 2024, 1.2% for 2025, and 1.1% for 2026. Meanwhile, economic growth is expected to remain moderate, with a growth rate of around 1% this year.

Switzerland's trade surplus decreased to 2.2 billion Swiss francs in February, down from 2.7 billion the previous month, driven by increased imports. Imports increased by 2.9% to 18.9 billion Swiss francs, mainly due to higher purchases of vehicles and chemical products. Meanwhile, exports grew slightly by 0.1% to 21.2 billion CHF, primarily driven by increased sales of food and beverages. The majority of exports still go to Russia, India, and Saudi Arabia.

Switzerland's economic indicator index decreased to 101.5 in March, lower than the expected 102, but still higher than the long-term average. This suggests a positive outlook for the Swiss economy in the future. However, industries related to construction and private consumption continue to contract, while manufacturing, finance, and insurance sectors show signs of expansion.

Techical analysis data (5H)

Resistance: 0.9094, 0.9103, 0.911

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 0.9071 - 0.9078 but cannot break the support at 0.9078, you may set a TP at approximately 0.9103 and SL at around 0.9062 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 0.9094 - 0.9103, you may set a TP at approximately 0.911 and SL at around 0.9071 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 0.9094 - 0.9103 but cannot break the resistance at 0.9094, you may set a TP at approximately 0.9071 and SL at around 0.911 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 0.9071 - 0.9078, you may set a TP at approximately 0.9062 and SL at around 0.9103 or according to your acceptable risk.

Pivot point April 3, 2024 08:25 PM. GMT+7