Investing.com - The Swiss franc rose to the day’s highs against the dollar and the euro on Thursday after the Swiss National Bank kept interest rates unchanged at record lows and said the Swiss franc was still “significantly overvalued.”
USD/CHF slid 0.41% to 0.9673 compared to 0.9708 earlier, while EUR/CHF touched lows of 1.0947 from around 1.0969 ahead of the decision.
The SNB held its benchmark interest rate unchanged at -0.75%, in line with expectations.
The central bank also left the target range for the three-month Libor unchanged at between -1.25% and -0.25%.
The Swiss franc is still significantly overvalued, despite a slight depreciation, the central bank’s statement said.
The statement added that negative interest rates and the SNB’s willingness to intervene in the foreign exchange market to make investments in Swiss francs less attractive both served to ease pressure on the franc.
The decision came as the Swiss government said Thursday it was expecting "below-average" economic growth this year and next year.
The State Secretariat for Economic Affairs said it now expected economic growth of 0.9% in 2015 and 1.5% in 2016.
"The sharp rise in the value of the Swiss franc from mid-January put a significant brake on the Swiss economy during the first half of 2015," the SECO said.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.24% to 95.27.
The dollar remained under pressure ahead of the conclusion of the closely watched Federal Reserve policy setting meeting later in the day amid uncertainty over whether the Fed would hike short term interest rates for the first time in almost a decade.
An increase in interest rates would boost the greenback by making it more attractive to yield-seeking investors.
The dollar eased against the other major currencies on Wednesday after data showing that U.S. inflation unexpectedly fell for the first time in seven months in August tempered expectations for a rate hike.
Fed Chair Janet Yellen has said that an interest rate increase is data dependent but has also indicated that she expects to begin raising rates before the end of the year.