Swiss National Bank's Martin: Inflation likely to remain elevated for some time

Martin, Vice Chairman of the Swiss National Bank (SNB), addressed the press conference following the September monetary policy assessment. The central bank held interest rates steady at 0%. Despite stronger-than-expected global economic growth in the second quarter, consumer spending showed minimal slowdown, even as purchasing power diminished.

Manufacturing momentum continued to improve, bolstering growth prospects. However, energy prices may prove to be notably higher than anticipated. Market uncertainty lingers, primarily due to the geopolitical situation in the Middle East.

During the press conference, the Swiss Franc lost value against the US Dollar, with USD/CHF rising by 0.28% to 0.8270. The Swiss Franc experienced the most significant decline against the New Zealand Dollar among major currencies. The heat map showcased the percentage changes of major currencies against each other, with the Swiss Franc as the base currency.

Mumbai-based Dhwani, a Senior Analyst and Manager at FXStreet, highlighted that the AUD/USD pair was losing ground towards 0.7000 in the Asian session following the release of Australia's August jobs report. The report revealed an unexpected rise in Australia's Unemployment Rate to 4.6% from the expected 4.5%, while Employment Change met forecasts at 39.5K.

Traders were also apprehensive about the upcoming Trump-Xi meeting. USD/JPY retreated from its three-week highs and hovered near 158.00 during the Asian session, while the US Dollar gained ground to a two-month high due to hawkish Federal Reserve expectations and elevated US bond yields. Gold settled near a one-week low as market participants awaited a critical meeting between US President Donald Trump and Chinese President Xi Jinping, with low expectations for any major announcements but keen interest in potential developments regarding rare earths, technology restrictions, and the extension of the current US-China truce.

The SNB maintained its key policy rates unchanged at 0%, as expected by market participants. The SNB's assessment of the economic outlook for Switzerland emphasized that the main risk stemmed from global economic developments, particularly the stance of the Bank of Japan in raising its short-term interest-rate target to 1.25% from 1.00%, marking a step towards normalizing monetary policy.