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US dollar climbed to highs unseen in two weeks against the Swiss franc, following the decision by the Swiss National Bank (SNB) to leave borrowing costs without change at the policy meeting today, while yesterday the Federal Reserve indicated that a possible raise in interest rates may occur by the middle of 2015.

USD/CHF reached a daily high at 0.8832 at 9:15 GMT. At 9:19 GMT the pair was gaining 0.20% for the day to trade at 0.8828. Support was likely to be found at March 19th low, 0.8731, while resistance was to be met at March 6th high, 0.8892.

At its meeting on policy, concluded on March 19th, the Federal Open Market Committee (FOMC) decided to pare back its monthly monetary stimulus by another 10 billion USD to 55 billion USD, while stating that asset purchases will be reduced by “further measured steps.” The Committee also dropped the unemployment rate threshold for considering when to raise interest rates, making a transition to a wider set of data.

At a press conference after her first meeting as Federal Reserve Chair, Janet Yellen said there might be a “considerable time” between the end of the stimulus program and the first increase in borrowing costs, meaning “around six months or that type of thing”.

According to Fed policy makers the benchmark interest rate target will be 1% at the end of 2015 and 2.25% in 2016. This has been a revision up compared to what was suggested in December, when central bank officials projected rates of 0.75% and 1.75% for the two respective periods.

Meanwhile, earlier today the Swiss National Bank decided to leave its benchmark interest rate without change at 0 to 0.25% in consonance with expectations. The cap on the Swiss franc against the euro has also been kept at 1.2000. The central bank imposed this cap during September 2011 in order to safeguard Switzerland against deflation and recession, after panic among market participants, induced by the world financial crisis, caused the Swiss currency to surge, while almost reaching parity with the euro.

The SNB also revised down its inflationary expectations. Consumer prices in Switzerland may remain almost unchanged during this year and increase 0.4% during 2015.

Switzerland produced a wider than projected surplus on its trade balance during February, an official report stated. The surplus figure was 2.62 billion CHF last month, while experts had anticipated a surplus at the amount of 2.47 billion CHF. Januarys surplus has been revised down to 2.55 billion CHF from 2.59 billion CHF previously.

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