GM settles hundreds of ignition switch lawsuits
NEW YORK General Motors Co has agreed to settle federal lawsuits by as many as 203 plaintiffs over defective ignition switches in its vehicles, a Friday court filing shows.
ZURICH The Swiss National Bank is not expected to lift its lid on the Swiss franc until at least 2015, a Reuters poll showed on Tuesday, with some economists suggesting the central bank may never need to officially exit the currency cap at all.
The SNB imposed a ceiling on the Swiss franc at 1.20 per euro in September 2011 to fend off deflation and a recession, after investors fleeing the euro zone crisis bid the safe-haven currency up to record levels in a matter of months.
All 20 economists who replied to a question about the cap said the SNB would keep it through 2014. Eleven expect it to end sometime in 2015, but a further nine predicted it could last even longer.
Some questioned whether the SNB would even need to announce an official exit from the cap at all, alluding to the central bank's 1978 cap on the franc against the German mark that was never officially lifted.
"There will be no official announcement, merely a lowering of the frequency and tone of commitment to 'floor'," said Peter Rosenstreich at Swissquote.
SNB Board Member Fritz Zurbruegg also suggested last month the bank may not need to flag an exit. Zurbruegg said in the SNB's basic scenario, safe-haven pressures on the franc arising from tension in the euro zone would eventually disappear, causing the franc to weaken.
The bank is expected to reaffirm its commitment to the policy when it announces its quarterly monetary policy decision at 0830 GMT on Thursday.
A crisis in Ukraine has pushed the currency closer to its 1.20 per euro limit in recent days, underscoring the safe-haven franc's exposure to turmoil overseas. It was trading at 1.2151 on Tuesday.
All of the 37 economists polled also expect the central bank to keep its target range for the Swiss franc LIBOR, its benchmark interest rate, at 0 to 0.25 percent for now. They all expect it to remain near zero through 2014, with a couple forecasting a first hike in 2015.
The timing of an interest rate hike in Switzerland would depend on the U.S. Federal Reserve and the European Central Bank, analysts said.
"Only when the (ECB) has started to raise its policy rate - in turn partly influenced by the timing of the U.S. Fed lifting its key rate - will the SNB will have leeway to do so too," said Timo Klein at IHS Global Insight.
Raising rates before the ECB could cause investors to flood into the franc, putting pressure on the SNB's currency cap against the euro.
The central bank will also issue fresh growth and inflation forecasts on Thursday. Economists expect it to confirm its December forecast for growth of around 2.0 percent in 2014.
Price pressures are not forecast to approach the SNB's 2 percent threshold any time soon. The bank is expected to confirm its predictions for inflation of 0.2 percent in 2014 and 0.6 percent in 2015, and issue a forecast for 1.0 percent inflation in 2016.
(Polling by Ishaan Gera and Diptarka Roy Writing by Alice Baghdjian; Editing by Alison Williams)
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