Swiss Bank Likely to Intervene at EUR/CHF 1.30
July 7, 2010 at 11:13 UTC || By Forex Playmaker
The Swiss National Bank will likely resume its intervention efforts aimed at weakening the franc relative to the euro once the 1.30 level is reached.
Sluggish Swiss CPI suggests that deflationary risks still threaten the domestic economy, against which the SNB will take action via the EUR/CHF. The 1.30 handle is the whisper number circulating dealers’ desks.
The EUR/CHF is last trading at 1.3308. The Swiss Bank has offered a new target for the pair, which will likely be realized in short order — the 1.30 handle is the new target and dealers love testing Swiss resolve.
Expect the EUR/CHF to trade down to 1.30 by early next week. The Swiss intervention will serve to drive the USD/CHF higher as well, which would make for a good proxy trade POST-intervention. On an aggressive stance by the SNB, the USD/CHF could easily see upwards of 1,000 pips upside.
