LONDON- The Swiss franc rallied against its major peers on Thursday and is on track to post its biggest daily jump versus the greenback in a month after the Swiss National Bank declined to match the European Central Bank and the U.S. Fed in easing policy.
The SNB kept its policy rate unchanged at -0.75%, as expected by most analysts in a Reuters poll. It maintained the rate it charges on the excess cash it holds for commercial banks at -0.75%, though it raised the threshold at which the negative rate charges kick in.
"The SNB was a surprise and they will focus on FX intervention," said Kenneth Broux, a strategist at Societe Generale based in London.
"The announcement on the threshold indicates a greater effort to offset the negative rate impact on bank profitability."
The franc jumped half a percent against the greenback to $0.9908 and rallied more than 1% versus the Australian dollar, a currency pair typically favoured by hedge funds.
Even the Norwegian crown briefly rallied after the central bank raised its main interest rate by a quarter percentage point as expected but said further policy tightening had become less likely amid a global slowdown.
Against the dollar, the crown which had gained 0.2% after the decision, erased gains and was broadly flat on the day at 8.94 crowns per dollar.
Elsewhere, the Japanese yen held on to earlier gains after the Bank of Japan kept interest rates on hold, while the dollar struggled to move higher despite the Federal Reserve offering mixed signals about the path for further easing.
The Bank of Japan kept monetary policy steady - as expected - and signalled the chance of expanding stimulus as early as its next policy meeting in October by issuing a stronger warning over the risks threatening the economy.
The yen rose to as high as 107.79 yen per dollar before settling at 108.06, up 0.4% on the day.
The dollar dipped slightly against a basket of currencies, as it struggled to gain despite a more hawkish than forecast tone from Wednesday's Federal Reserve meeting.
The U.S. central bank, on a 7-3 vote, lowered the Fed funds target rate to a range of 1.75% to 2.00% "in light of the implications of global developments for the economic outlook".
The Australian dollar had its worst day in a month as expectations for more central bank rate cuts leapt after joblessness hit a one-year high.
The Aussie dropped 0.7% to a two-week low of $0.6782.
(Reporting by Tommy Wilkes and Saikat Chatterjee; Editing by Alex Richardson) ((firstname.lastname@example.org))