Swiss Franc Eases Following SNB Rate Hike

(RTTNews) - The Swiss franc that traded higher in the European session on Thursday following the Swiss National Bank's decision to raise its key interest rate retraced its gains shortly.

The SNB raised its policy rate by 0.5 percentage points to 1.5 percent, as expected.

"It cannot be ruled out that additional rises in the SNB policy rate will be necessary to ensure price stability over the medium term," the bank said in the statement.

The central bank said it stands ready to be active in the foreign exchange market as necessary.

On Wednesday, the Federal Reserve raised interest rate by 25 basis points and signaled a pause in its rate-hike cycle soon amid the recent turmoil in the banking sector.

The franc fell to 1.1302 against the pound and 0.9180 against the greenback, after rising to a 6-day high of 1.1228 and a 9-day high of 0.9118, respectively in early deals. If the currency drops further, 1.15 and 0.94 are possibly seen as its next support levels against the pound and the greenback, respectively.

The franc retreated to 0.9990 against the euro, from a high of 0.9934 hit at 4:30 am ET. This may be compared to a 3-week low of 0.9997 seen at 2:25 am ET. The franc had ended yesterday's trading session at 0.9952 against the euro. The franc may find support around the 1.04 level.

The franc remained firm at 143.71 against the yen, up from a 2-day low of 142.55 touched at 11:15 pm ET. The pair was valued at 143.11 when it ended trading on Wednesday. Next near term resistance for the currency is likely seen around the 146.00 level.

Looking ahead, the Bank of England's monetary policy announcement is due at 8:00 am ET. The BoE is widely expected to raise its key rate by 25 basis points to 4.25 percent from 4 percent.

U.S. weekly jobless claims for the week ended March 18 and new home sales for February will be published in the New York session.

Eurozone flash consumer sentiment index for March will be out at 11 am ET.