Swiss inflation unexpectedly remained at 0.6% in May, raising doubts about an imminent SNB rate cut and bolstering the Swiss franc against major currencies.
Swiss CPI held at 0.6% y/y, defying expectations of a decline and casting doubt on the SNB's need for immediate rate cuts. The data lifted the franc, as markets scaled back easing bets, pressuring USD/CHF lower.
The steady inflation print reduces the likelihood of an SNB rate cut, which should support the Swiss franc and push USD/CHF lower. Traders may target support at 0.82 if the SNB holds rates.
Key support at 0.82, with a break below potentially accelerating losses toward 0.81. Resistance at 0.84 caps upside attempts.
Sticky Swiss inflation at 0.6% y/y challenges the SNB's dovish stance, propelling the franc against the euro. With the ECB also navigating rate decisions, EUR/CHF faces downside as rate differentials narrow in the franc's favor.
The franc strengthens on reduced SNB rate cut bets, pushing EUR/CHF lower. The pair may test the 0.9400 support level if markets further unwind dovish SNB expectations.
While the SNB traditionally dislikes franc strength, the steady inflation print may reduce its urgency to cut rates or intervene verbally, though a sharp franc appreciation could still prompt action.
Swiss consumer prices held steady at 0.6% year-on-year in May, surprising economists who expected a slight deceleration. The sticky inflation reading comes just days before the Swiss National Bank’s policy meeting, where markets had priced in a rate cut. The data may challenge the SNB’s easing bias, potentially keeping the franc supported near-term.
Swiss consumer prices rose 0.6% year-on-year in May, unchanged from April and contrary to forecasts of a 0.5% reading. Monthly inflation was likely flat.
The SNB is set to decide on interest rates, and persistently stable inflation may argue against additional rate cuts, especially if core inflation remains above the SNB’s comfort zone.
The Swiss franc gained against the euro and dollar as traders trimmed expectations for an immediate rate cut, pushing short-term Swiss yields higher.