ForexLive European FX news wrap: SNB cuts to 0%, BOE stays on hold as anticipated | Forexlive

Headlines:

Markets:

• CHF leads, NZD lags on the day
• European equities lower
• Gold up 0.1% to $3,371.05
• WTI crude up 2.0% to $74.53
• Bitcoin down 0.1% to $104,768

Key central bank policy decisions were the main draw in European trading today. Both the SNB and BOE delivered as expected though, so that left very little for market players to work with amid a US holiday beckoning.

The SNB cut its key policy rate by 25 bps to 0% and reintroduced tiered remuneration on its sight deposits while the BOE left its bank rate unchanged at 4.25%, reaffirming two-sided risks to inflation.

The former continues to do battle with deflationary risks while the latter has to be wary of stagflation risks amid a softening economy and more sticky inflation in the past two months. Despite that, we did see three policymakers dissent to the BOE decision in voting for a 25 bps rate cut instead. Dhingra and Taylor were expected but Ramsden joined in on their chorus this time around.

The market moves in relation to all of that were rather minimal. USD/CHF is down slightly by 0.2% to 0.8175 but it’s not indicative of much as Middle East tensions are also still holding high. Meanwhile, GBP/USD is up 0.1% to 1.3433 and that is not much changed at all from the BOE decision.

The dollar is keeping more mixed on the day, holding flat against the euro with EUR/USD at 1.1480 and USD/JPY up 0.4% to 145.66 amid quieter trading. It is a holiday in US so that will make for lighter trading conditions in the session ahead.

In other markets, European indices are down as we await further developments in the Middle East as to whether or not the US will intervene in the Iran-Israel conflict. Oil prices are also marked higher with WTI crude up 2% to $74.53 on the day.

With little else on the agenda for the remainder of the day, headline risks pertaining to the tensions between Iran and Israel are the main thing to watch.