Back
22 May 2013
Flash: The Swiss franc has continued to weaken - BBH
FXstreet.com (Barcelona) - Brown Brothers Harriman analysts note that the euro is at 2-year highs against the Swiss franc and although the euro has been appreciating since mid-April, the trend has accelerated.
Further, they comment that yesterday the IMF advocated that the SNB consider a negative deposit rate if the franc came under new pressure. The market focused on this more than the IMF's other advice that the SNB should take advantage of franc weakness to unwind some of its balance sheet expansion. They write, “Today the SNB's Jordan indicated that a negative deposit rate and/or a shift in currency cap are still policy options. Many are talking about the euro rising toward CHF1.30 now that the CHF1.25 area has been convincingly breached. The next big target against the dollar is CHF1.000.”
Further, they comment that yesterday the IMF advocated that the SNB consider a negative deposit rate if the franc came under new pressure. The market focused on this more than the IMF's other advice that the SNB should take advantage of franc weakness to unwind some of its balance sheet expansion. They write, “Today the SNB's Jordan indicated that a negative deposit rate and/or a shift in currency cap are still policy options. Many are talking about the euro rising toward CHF1.30 now that the CHF1.25 area has been convincingly breached. The next big target against the dollar is CHF1.000.”