SNB rate hike seen having little effect on mkts - analysts

The Swiss National Bank's (SNB) decision to raise interest rates by a further 25 basis points was widely expected and a further hike at its meeting in December looks likely, economists said.
"The rate hike by 25 basis points did not come as a surprise," UBS economist Hanspeter Hausherr said, adding he didn't expect the Swiss franc to strengthen significantly.
While some economists speculated that the SNB might hike rates by 50 basis points in view of the weak franc, such a move would have been out of character, Hausherr added.
Given the healthy growth of the economy, with a forecast GDP growth of 3 pct and no significant slowdown in sight, the SNB is expected to raise rates once again after its meeting in December, Hausherr said.
As the rate hike and forecasts were widely anticipated, economists do not believe today's announcement will have a significant impact on the market.
However, the Swiss franc continued its recent downard trend after showing initially little reaction to the SNB's rate hike.
At 3.50 pm, the euro rose to 1.5899 sfr, while the dollar stood little changed at 1.2504.
At 1.5911 per euro, the Swiss franc yesterday slumped to its lowest level since the beginning of 2000.
One economist blamed the SNB's tame inflation outlook as primarily responsible for the continuing weakness of the Swiss franc, making further rate hikes appear less likely.
The SNB earlier today hiked its inflation forecast slightly to 1.3 pct in 2006 from 1.2 pct previously, but lowered its forecast for 2007 to 1.1 pct from 1.2 pct.