8 Dec 2014
SNB monitoring the soft stance of EUR – Rabobank
FXStreet (Barcelona) - According to Jane Foley, Senior Currency Strategist at Rabobank, in view of the persistence of deflation in Switzerland it is likely that the SNB is monitoring the soft stance of the EUR closely.
Key Quotes
“EUR/CHF has been traded close to the SNB’s 1.20 EUR/CHF floor since the middle of last month. Although some respite for the CHF was garnered from the ‘no’ vote in last week’s referendum regarding the SNB’s holdings of gold reserves, EUR/CHF has not held so close to the EUR/CHF ‘floor’ since 2012.”
“Since the ECB pushed its deposit rate into negative territory in June there has been speculation in the market as to whether the SNB will also be forced to push rates below zero. This talk has been stirred by comments from various SNB members since the summer, though it has been countered by concerns that it could add fresh momentum to the housing market and to household debt/income ratios.”
“This week’s SNB meeting should add a little fresh energy into the debate surrounding the direction of Swiss interest rates. We would be looking to buy USD/CHF into any pull backs. The May 2013 high around USD/CHF0.9839 should offer some resistance; a break above could spur a move towards the 2012 high around USD/CHF0.9972.”
Key Quotes
“EUR/CHF has been traded close to the SNB’s 1.20 EUR/CHF floor since the middle of last month. Although some respite for the CHF was garnered from the ‘no’ vote in last week’s referendum regarding the SNB’s holdings of gold reserves, EUR/CHF has not held so close to the EUR/CHF ‘floor’ since 2012.”
“Since the ECB pushed its deposit rate into negative territory in June there has been speculation in the market as to whether the SNB will also be forced to push rates below zero. This talk has been stirred by comments from various SNB members since the summer, though it has been countered by concerns that it could add fresh momentum to the housing market and to household debt/income ratios.”
“This week’s SNB meeting should add a little fresh energy into the debate surrounding the direction of Swiss interest rates. We would be looking to buy USD/CHF into any pull backs. The May 2013 high around USD/CHF0.9839 should offer some resistance; a break above could spur a move towards the 2012 high around USD/CHF0.9972.”