The U.S. dollar has soared since the FOMC meeting on Thursday morning. The Federal Reserve hinted at the prospect of a rate hike in 2023. Another different thing happened in the market. 

Contrary to the Fed, the SNB today (June 17) states that Switzerland's inflation projection is near zero until 2023. That still occurred although interest rates remain at the world's lowest level.

As a result, the USD/CHF skyrocketed to a two-month high of 0.9175. In its meeting results announcement, the Swiss central bank (SNB) said it would maintain an accommodative policy with interest rates at -0.75 percent. 

The central bank said the pace of consumer inflation, which has risen since April, is likely to continue to rise until the end of the year. However, the increase in the rate of inflation is only temporary.

Why the Dovish Attitude is Taken? 

Jordan as the representative is further reiterated his dovish stance in a press conference held after the announcement. He argues inflation should be well above the range considered consistent.

That is with medium-term price stability before the central bank can raise interest rates. In addition, Jordan signaled readiness to intervene in the forex market "if necessary".

The aim is to prevent the strengthening of the CHF currency exchange rate which he said was "already very strong”. In short, if someone is looking for monetary policy action (a rate hike -red), he is better to turn elsewhere.

It is maybe to Norway or the United States. Although the investors previously the end of 2023, many parties think there's very little prospect of a rate hike by the SNB until a time far beyond our projection horizon.

The Switzerland is Getting More Benefits

The US dollar index (DXY) briefly broke above the threshold of 92.00 in European session trading on Friday (June 18). It is ready to fulfill the most fantastic weekly gain in nine months. 

The greenback's rival currencies bowed to their knees in yesterday's suddenly hawkish FOMC statement. The latest FOMC statement reveals the fact that most Fed officials expect a rate hike to occur in 2023.

They decided that rather than start in 2024 as previously forecast. This assumption also advances the time forecast for tapering or trimming the asset purchase program in Uncle Sam's country.

In contrast to the FOMC's stance, the European Central Bank (ECB) a week earlier reaffirmed its commitment to maintain its current asset and interest rate buying programme. 

The USD may still has a Good Position

In fact, some market participants had hoped the ECB would start tapering this month. The U.S. central bank is one step ahead and the USD result is likely to remain well-held against the EUR.

There is not any important data will be published today or as early as next week, forex markets are likely to primarily feel the continuing effects of the Fed meeting. 

The firmness of maintaining a dovish stance was also demonstrated by the Swiss central bank (SNB) in its policy meeting this week. The rate of inflation in Rolex-making countries is likely to remain low for years to come.

The snb’s Interest Rate is Still Low

That is why; the SNB chose to keep its interest rates at the lowest levels in the world. As the news was written, EUR/USD began to show resistance in the range of 1.1913. 

Meanwhile, the USD/CHF continued to rise until it occupied the range of 0.9190s. Elsewhere, the Aussie and Kiwi were also hit by the greenback despite some impressive domestic economic data. 

The AUD/USD touched a record low since December 2020 in the Asian session this morning, although Australia's unemployment rate fell dramatically. NZD/USD also hit record low since April 2021.