The Sterling has risen in response to the Bank of England’s (BoE) 25 bps rate hike, as the US Dollar has fallen.
After achieving a high of 1.0050 on June 16, the USD/CHF has formed a double top, and following the statement of the Swiss National Bank (SNB), it has since fallen under 0.9700.
The SNB has a long record of making unorthodox policy changes. The most well-known example is the abandonment of a cap on the strengthening Franc in 2015, which made EUR/CHF rocket from 1.2000 to 0.8600 in a matter of months. It then returned to above parity, where it has remained for the most part.
The Bank of England was more forthright, executing on the scripted rate hike of 25 bps. During the Asian session, the GBP/USD exchange rate is just marginally lower.
As the Us Dollar is under pressure worldwide, the USD/JPY soared when the Bank of Japan maintained its monetary policies. The inflation figures being out on June 23 will be extensively scrutinized.
Futures have recovered slightly following a sharply bearish Wall Street cash session. Hong Kong and Chinese markets gained momentum as the Australian and Japanese stocks fell. Industrial metals have likewise weakened, while gold has remained relatively stable at US$ 1,842/oz. The Brent contract is trading near the US $119 a barrel while the WTI futures contract is trading below the US $117 a barrel.
Following the Eurozone CPI, industrial production numbers will be released in Canada and the United States.