Investing.com - The Swiss franc strengthened against the euro and the dollar on Thursday after the Swiss National Bank kept its interest rates and deposit charges unchanged, but indicated that it would “remain active” in forging exchange markets.
EUR/CHF was last down 0.44% to 1.0579 from around 1.0625 ahead of the SNB’s policy announcement.
The SNB said it was keeping its benchmark interest rate unchanged at minus 0.75%, in line with market expectations. The central bank left the target range for the three-month Libor unchanged at between minus 1.25% and minus 0.25%.
In a statement, the central bank said the Swiss franc continued to be “significantly overvalued” and added that it will "remain active in the foreign exchange market, as necessary, in order to influence monetary conditions."
The SNB also cut its forecasts for inflation and growth from its December forecast, in response to the franc’s rally against the euro after it abandoned its 1.20 exchange rate floor against the single currency in mid-January.
USD/CHF was last at 0.9908, off highs of 0.9982, but still 1.34% higher for the day.
The dollar rebounded against the other major currencies on Thursday following steep declines in the previous session, after the Federal Reserve struck a more dovish tone than expected on interest rates.
In a statement following its monetary policy meeting, the U.S. central bank downgraded its forecasts for growth and inflation and lowered its interest rate projections.
The Fed dropped a reference to being "patient" on the timing of rate hikes, but added that the change in its forward guidance did not mean it has decided on the timing for an initial rate increase.
The statement prompted investors to push back expectations on the timing and pace of future rate increases.
Fed Chair Janet Yellen also warned that the stronger dollar was acting as a drag on U.S. exports and was pushing down inflation.