USD/CHF surged following the latest SNB announcement. This is because previous Swiss interest rate expectations were much higher than current.

The Swiss National Bank (SNB) followed in the footsteps of the Federal Reserve by not changing its interest rates at its policy meeting today (September 21st). However, the unexpected move by the SNB had the opposite effect of the Fed's announcement earlier in the morning. The SNB interest rate announcement instantly caused USD/CHF to surge by nearly 100 pips.

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Traders and investors had previously been confident that the SNB would raise interest rates by 25 basis points at its policy meeting today. However, the SNB decided to maintain the interest rate at 1.75%. The SNB justified this decision by stating that inflationary pressures in Switzerland had subsided, so there was no need for further aggressive rate hikes.

"The situation allows us to wait for now and review at the next monetary policy assessment whether the monetary policy measures we have taken to date are sufficient to keep inflation within the price stability range on a sustainable basis," said Jordan in comments he was due to make after the SNB's latest interest rate decision.

He added, "We will not hesitate to tighten our monetary policy further if necessary to keep inflation below 2% on a sustainable basis."

The market reacted negatively to the SNB's announcement. This is because the previous expectations for the SNB's terminal interest rates were much higher than the current level. Some market participants also doubt that the SNB will raise rates again in the coming months, regardless of Thomas Jordan's statements to the reporters.

USD/CHF immediately surged by almost 1% to the 0.9070s as of the time this news was written, reaching a new high since June. Meanwhile, GBP/CHF saw limited gains of around 0.5% as market participants remained in a wait-and-see mode ahead of the Bank of England's interest rate announcement today.

The EUR/CHF currency pair also recorded its best daily performance in several months, surging from its lowest level at 0.9563 to 0.9670. The market perceives the implications of this Swiss interest rate decision to be more dovish than last week's ECB policy