Swiss Franc to Rise as SNB Backs Off Intervention
March 16, 2010 at 13:45 UTC || By Forex Playmaker
Bloomberg is reporting that the Swiss National Bank (SNB) may relax its intervention policies aimed at weakening the Swiss Franc (CHF):
The Swiss franc strengthened to the highest level in almost a year and a half against the euro amid speculation the central bank is relaxing resistance to the currency’s gains as the economic recovery takes hold.
The franc climbed against 12 of its 16 most active peers as the government raised its forecast for 2010 growth amid improved consumer spending. The franc is set to close above 1.4578 per euro for a third day, a level that UniCredit SpA analysts say has prompted the Swiss National Bank to intervene to weaken the currency in the past. The currency later trimmed gains against the euro after Greece had the threat of a cut to its credit rating reduced by Standard & Poor’s.
“It’s a signal that the SNB is relaxing its resistance to the franc’s appreciation,” said Geoffrey Yu, a currency strategist at UBS AG in London. “Perhaps it’s a general realisation that there is no point. …”
SNB intervention has done little to curb the franc’s appreciation against the Euro over the past year. Should the specter of further SNB intervention be removed from the marketplace, then the EUR/CHF could fall substantially in the months ahead.
Full Article: Swiss Franc Rises Versus Euro on SNB Speculation and Economy
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Check out what others are saying about this post...[...] noted in previous posts, the EUR/CHF is poised for further, dramatic depreciation. In addition to the SNB relaxing its [...]
[...] over the last 10 days. What’s that perfectly sound logical argument? Now I remember … Post hoc ergo propter hoc. Join the forum discussion on this post Share this [...]
[...] it was speculated that the SNB would relax its intervention efforts, one would still have expected them to intervene [...]