The Swiss franc has strengthened vs. the Euro (among others) as the SNB elected to take a wait and see approach to their monetary policy as they made no changes. This means that the interest rate is still at 0%, and that the target vs. Euro remains at 1.20.
There were some in the market who wanted to see them raise the target to 1.30 as franc strength has been hurting exports. There were also rumors being floated that perhaps they would consider negative interest rates. Neither action materialized so the franc moved higher as a result.
At this point, the economic data is beginning to weaken in Switzerland and inflation is not a problem as in fact they are seeing deflation. This situation looks eerily similar to what has occurred in Japan, and this will be a difficult cycle to break without major risks to the economy.
With the Euro debt crisis still providing risk to the markets, there may be a test of that 1.20 level at some point, especially if the Euro situation worsens. Will the SNB have the moxie to defend the 1.20 level? Stay tuned!
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