2021.06.1710:08:00UTC+00Franc Weakens As Swiss National Bank Keeps Expansionary Policy On Hold

The Swiss franc depreciated against its major trading partners in the European session on Thursday, after the Swiss National Bank maintained its expansionary monetary policy to stabilize economic activity and price pressures, while pledging to intervene in the foreign exchange market as necessary.

Policymakers of the SNB retained the policy rate and interest on sight deposits at the bank at -0.75 percent.

The bank repeated that it is willing to intervene in the foreign exchange market as necessary, while taking the overall currency situation into consideration.

The central bank forecast consumer prices to rise 0.4 percent this year and 0.6 percent each in 2022 and 2023. The projection for 2021 was revised up from 0.2 percent and that for 2022 from 0.4 percent.

The bank expects Swiss GDP to return to its pre-crisis level by the middle of the year. The bank raised its growth outlook for this year to around 3.5 percent citing the lower-than-expected decline in GDP in the first quarter.

Data from the Federal Customs Administration showed that Switzerland's exports increased in May.

Exports rose by a real 2.6 percent month-on-month in May, after a 0.3 percent fall in April.

Imports fell 1.1 percent monthly in May, after a 1.3 percent increase in the previous month.

The franc showed a mixed trend against its major rivals in the Asian session. It dropped against the greenback and the pound, whereas it held steady against the euro and the yen.

The franc lost 0.2 percent to hit a 1-week low of 1.0921 against the euro. The pair had closed Wednesday's deals at 1.0897. Further decline in the franc may challenge support around the 1.12 area.

The franc was down by 0.6 percent at 0.9141 against the greenback, its lowest level since May 6. At Wednesday's close, the pair was valued at 0.9086. The franc is seen locating support around the 0.94 mark.

The franc slipped to nearly a 2-week low of 1.2779 against the pound, falling by 0.7 percent from yesterday's close of 1.2693. Extension of the franc's downtrend may take it to a support around the 1.31 region.

The franc shed 0.6 percent against the yen, dropping to more than a 3-week low of 121.04. The pair was worth 121.82 when it ended deals on Wednesday. Immediate support for the franc is possibly seen around the 117 level.

Looking ahead, U.S. weekly jobless claims for the week ended June 12 and leading index for May will be published in the New York session.