SNB SurpriseThe Swiss Franc has exploded higher today following a shock rate hike from the SNB. The market was widely expecting the SNB to leave rates at -0.75%, the lowest in the world. However, the bank joined the growing tide of central banks tightening their monetary policy by announcing a .5% hike at its June meeting today.The SNB cited the need to tame soaring inflation as the main driver behind the move and warned that further tightening might be necessary. The bank also lifted its inflation forecasts, now projecting year end inflation to hit 2.8% in 2022 and 1.9% in 2023.Looking ahead, the SNB noted “It cannot be ruled out that further increases in the SNB policy rate will be necessary in the foreseeable future to stabilize inflation.”The move is noteworthy as the SNB’s policy usually tends to follow that of the ECB. However, in hiking rates today, the SNB has front-run the projected ECB rate hike coming in July. Interestingly, also, the SNB made no reference to the strength of CHF which is typically a key focus point of the bank’s communications. With this in mind, traders are now anticipating further hikes from the SNB in the near-future.Technical ViewsEURCHFThe rally in CHF today has seen EURCHF plummeting lower. Price has broken through the 1.03330 and the rising trend line from year-to-date lows. Price is now sitting on support at the 1.0199 level and, with both MACD and RSI bearish, the focus is on a further push lower with 1.0015 the bigger downside target for bears.
Source: Tickmill
