The Swiss National Bank has reaffirmed their commitment to the minimum exchange rate of CHF 1.20 per Euro.
“Consequently, the SNB will continue to enforce the minimum exchange rate with the utmost determination. It is prepared to buy foreign currency in unlimited quantities for this purpose.”
There had been concern that a referendum (Save Our Swiss Gold) would leave the SNB unable to maintain the floor. The initiative was rejected by the Swiss people, which initially put a bid into EURCHF, opening higher in Asia after the announcement.
The central bank has effectively sat on its hands, vocally committing to intervene in the markets, but simply reaffirming their previous stance. The currency pair has been grinding towards the 1.20 cap, with traders unwilling to push the pair too close the line in the sand.
The SNB has lowered its inflation forecast downwards from the previous quarter, highlighting the decline in the oil price, which is expected to drag inflation into negative territory during the next four quarters.
EURCHF was offered following the announcement, trading down from 1.2035 to 1.2014 at the time of writing.
Link to full SNB press release Monetary policy assessment of 11 December 2014