Intervention of the SNB and EURCHF | Business Top stories

Intervention of the SNB and EURCHF

| Business Top stories | World News

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BNS

Relying on a spear can be a similar analogy to relying on the SNB to intervene in the EURCHF exchange rate. In January 2015, the SNB pulled out of defense of the 1.2000 parity and the pair fell dramatically. However, despite this unreliable past, the SNB has always intervened regularly in the EURCHF pair by buying euros and dollars to try to weaken the CHF.

Maechler of the SNB

Last week, Maechler of the SNB reiterated that the SNB can still intervene in the currency market, but does not focus on a particular level of the franc. Maechler said. “We are always ready to intervene in the foreign exchange markets if necessary”. However, she said that “We don’t have a specific exchange rate in mind, neither in terms of level nor in terms of pairs.”

The recent strength of the CHF has been quite marked. The large trade surplus helped fuel it.

Omicron fears

Omicron’s latest fears weighed on EURCHF as more flows entered CHF. However, the problem now is how bad the omicron variant is. If that wears off, it might be worth looking to EURCHF for some recovery. However, CHF’s strength strengthened even before the variant was announced, so it may still be premature to intervene. However, it is worth being aware of the pair as if / when we are seeing a recovery in the Eurozone and the world growth outlook the EURCHF should be a good beneficiary. So, not a trade for today, but a pair to watch out for.

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Intervention of the SNB and EURCHF

| Business Top Stories World news
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