Back
5 Feb 2015
EUR/CHF could stabilize around 1.05 – Rabobank
FXStreet (Edinburgh) - The prospects of further SNB intervention could be aimed to set a ‘soft floor’ in the cross in the boundaries of 1.05, suggested Senior Currency Strategist at Rabobank Jan Foley.
Key Quotes
“After more than 3 years of upholding the EUR/CHF1.20 floor, the SNB brought this policy to an abrupt halt in mid-January”.
“If the weakness of the EUR has been proving problematic for the SNB, so too has been the CHF’s long standing function as a safe haven asset”.
“Concerns regarding weak world growth have intensified. Demand for safe haven is apparent in low levels of government bond yields and in the better tone of the JPY”.
“Despite negative interest rates, it is likely that the strength of Swiss’s budget and current account positions will ensure strong demand for CHF”.
“Although the SNB has walked away from the EUR/CHF 1.20, it seems likely that it is still intervening. Talk of a ‘soft-floor’ suggests EUR/CHF could stabilize close to 1.05”.
Key Quotes
“After more than 3 years of upholding the EUR/CHF1.20 floor, the SNB brought this policy to an abrupt halt in mid-January”.
“If the weakness of the EUR has been proving problematic for the SNB, so too has been the CHF’s long standing function as a safe haven asset”.
“Concerns regarding weak world growth have intensified. Demand for safe haven is apparent in low levels of government bond yields and in the better tone of the JPY”.
“Despite negative interest rates, it is likely that the strength of Swiss’s budget and current account positions will ensure strong demand for CHF”.
“Although the SNB has walked away from the EUR/CHF 1.20, it seems likely that it is still intervening. Talk of a ‘soft-floor’ suggests EUR/CHF could stabilize close to 1.05”.