SNB removes FX floor

In September 2011, the Swiss National Bank set a minimum exchange rate against the euro at 1.20. This was imposed owing to the massive overvaluation of the Swiss France at the height of the eurozone crisis.

Swiss franc
Source: Bloomberg

In a surprise move today, the SNB has lowered its benchmark deposit rate to -0.75% and removed the 1.20 EUR/CHF floor, stating that the decision is to ensure against inappropriate tightening of monetary conditions.

The announcement has come as a shock to the market, and given the dramatic moves in the euro it is now wholly expected that the European Central Bank is to announce a full-scale quantitative easing programme in its next meeting on 22 January.

Read SNB statement

There will be a live press conference at 12.15 GMT where we can expect to hear more detail on this dramatic decision.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.