The Swiss franc lost ground against its major counterparts in the early European session on Thursday, after the Swiss National Bank maintained its expansionary monetary policy stance, while cautioning that the currency remained "highly valued" and is willing to intervene in the foreign exchange market.

The interest rate on sight deposits at the SNB was retained at -0.75 percent and the target range for the three-month Libor was kept unchanged between -1.25 percent and -0.25 percent.

The bank observed that the Swiss franc has appreciated slightly overall on the back of the weaker US dollar. The Swiss franc remains highly valued.

The SNB assessed that the negative interest rate and its willingness to intervene in the foreign exchange market, as necessary, remain essential.

The bank downgraded its inflation forecast for both this year and next. Inflation for this year was seen at 0.6 percent instead of 0.7 percent. For 2019, the SNB expects inflation of 0.9 percent compared to 1.1 percent estimated initially. For 2020, the bank projected 1.9 percent.

European shares are higher, as encouraging earnings results offset concerns over trade war.

The franc showed mixed performance against its major rivals in the Asian session. While it held steady against the euro and the pound, it fell against the yen. Against the greenback, the currency rose.

Having advanced to a 2-day high of 1.1680 against the euro at 9:00 pm ET, the franc reversed direction and was trading lower at 1.1697. On the downside, 1.18 is likely seen as next support level for the franc.

Data from the European Automobile Manufacturers' Association showed that Europe's new car registrations grew at a slower pace in February.

Passenger car market grew 4.3 percent year-on-year in February, slower than the 7.1 percent increase registered in January.

The franc weakened to 0.9459 against the greenback, down by 0.3 percent from a high of 0.9433 hit at 9:00 pm ET. The franc is seen finding support around the 0.97 level.

The franc lost 0.3 percent to 1.3223 against the pound, from a high of 1.3182 hit at 9:00 pm ET. If the franc drops further, it may find support around the 1.34 area.

The franc eased back to 112.06 against the yen, just few pips short of a 6-day low of 112.03 hit at 1:15 am ET. The next possible support for the franc is seen around the 111.00 level.

Looking ahead, U.S. import and export prices for February, weekly jobless claims for the week ended March 10 and NAHB housing market index for March, along with Canada existing home sales for February are scheduled for release in the New York session.

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