The Swiss National Bank (SNB) is expected to continue its monetary easing cycle due to a slowdown in Switzerland's inflation and the strength of the Swiss franc, according to a report by Gavekal Research. Inflation in Switzerland dropped to 1.1% year-on-year in August, below expectations and the SNB's target of 1.5%. This could lead to further cuts in the policy rate and increased foreign exchange purchases by the SNB to counteract the franc's appreciation, which is impacting Swiss exporters. Stay tuned for more updates on Switzerland's monetary policy and its impact on the global economy.
Analysis:
- SNB might engage in prolonged monetary easing cycle due to low inflation and strong Swiss franc
- Inflation in Switzerland fell to 1.1% in August, below SNB's 1.5% target
- Swiss franc's appreciation affecting exporters and pushing economy towards deflation
- SNB has already reduced policy rate twice and may make further cuts
- SNB could increase foreign exchange purchases to counteract franc's strength
- Impact of SNB's decisions on global economy and financial markets.