The Swiss franc fell on Thursday after the Swiss National Bank (SNB) hiked its benchmark interest rate, while the Norwegian crown surged after a bolder Norges Bank move.

The SNB raised its benchmark interest rate by 25 basis points to 1.75%, defying some market expectations of a bigger increase.

Despite an easing in Swiss inflation, currently the lowest among G10 economies at 2.2%, SNB Chairman Thomas Jordan recently repeated his readiness to raise rates, encouraging markets to expect a 50-bps hike.

However, economists polled by Reuters had expected the SNB to hike rates by 25 bps.

The Swiss franc fell 0.2% to 0.8945 against the dollar, moving away from a six-week high it touched last week.

The euro rose by as much as 0.2% to 0.9828 francs .

The Norwegian crown surged instead after the Norges Bank raised its benchmark interest rate by 50 bps to a 15-year high, more than expected by a majority of economists surveyed by Reuters, and said it aimed for another hike in August.

The dollar steadied near a one-month low against a basket of currencies, after Federal Reserve Chair Jerome Powell offered little room for surprise at his semi-annual testimony to lawmakers on Capitol Hill.

In remarks to lawmakers on Wednesday, Powell said further U.S. rate increases are "a pretty good guess" of where the Fed is heading if the economy continues in its current direction.

His comments were in line with what the central bank said at its policy meeting last week.

The U.S. dollar index last stood at 102.07, not far from its recent five-week low of 102.00, after having fallen nearly 0.5% in the previous session.

Trading was thin in Asia with Hong Kong and China closed for a holiday.

The euro rose to a more than one-month high of $1.10030, extending Wednesday's 0.65% jump.

Source : Reuters