Quick Facts
- Swiss National Bank cuts interest rates by 0.25% to -0.75%
- Bank of England expected to hold key interest rates steady at 1.25%
- US Federal Reserve signals pause in rate-hiking cycle
Forex Today: Swiss National Bank Cuts Rates, BoE Expected to Hold
March 20, 2025
The global financial markets are abuzz with excitement as the major central banks have begun to make their moves. In the UK, the Bank of England (BoE) is expected to hold its key interest rates steady, while in Switzerland, the Swiss National Bank (SNB) has surprised markets with a 0.25% rate cut. Meanwhile, the US Federal Reserve has provided some relief to global markets by signaling a pause in its rate-hiking cycle.
SNB Cuts Rates, Swiss Franc Falls
The Swiss National Bank (SNB) has surprised markets by cutting its key interest rates by 0.25% to -0.75%. This decision was made to combat the negative effects of the ongoing economic slowdown in Switzerland and to maintain the country’s economic competitiveness. The SNB has also maintained its negative interest rate policy, which aims to curb inflation and maintain price stability.
The move has immediately impacted the Swiss Franc (CHF), causing it to fall against major currencies such as the US Dollar (USD), Euro (EUR), and British Pound (GBP). This decline is likely to continue in the short term, making CHF a less attractive asset for investors. For forex traders, this presents a buying opportunity in the short term, especially against the Euro, which has been weak in recent weeks.
BoE Expected to Hold Rates Steady
In the UK, the Bank of England (BoE) is expected to hold its key interest rates steady at 1.25%. This decision is seen as a move to maintain the country’s economic stability and to combat inflation, which has been above the target rate of 2% for several months.
The BoE’s decision to hold rates steady is likely to have a limited impact on the British Pound (GBP), which has been under pressure in recent weeks due to Brexit uncertainty and economic slowdown. However, the pound may appreciate slightly in the short term if the BoE’s decision is seen as a sign of confidence in the UK economy.
Federal Reserve Signals Pause in Rate-Hiking Cycle
The US Federal Reserve has provided some relief to global markets by signaling a pause in its rate-hiking cycle. The central bank has indicated that it may slow down its pace of rate hikes or even pause its actions if inflation continues to slow down. This decision has been welcomed by stock markets, which have rallied in response.
The news has also boosted the value of the US Dollar (USD), which has strengthened against major currencies such as the Euro (EUR), British Pound (GBP), and Japanese Yen (JPY). For forex traders, this presents a buying opportunity in the US Dollar, especially against the Euro, which has been weak in recent weeks.
Gold and Copper on the Rise
The news has also had a significant impact on commodity prices. Gold has risen to a new all-time high price, driven by the increasing uncertainty in the markets and the likelihood of a global economic slowdown. The precious metal is often seen as a safe-haven asset during times of economic uncertainty, and its price is likely to continue to rally in the short term.
Copper, which is often seen as a bellwether for the global economy, has also risen to a fresh 9-month high. The metal’s price is driven by global demand and supply dynamics, and its rise is a sign of improving economic sentiment.
