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15 Jan 2015
EUR/CHF treading water below 1.0400
FXStreet (Edinburgh) - The Swiss franc is, of course, the outstanding performer today. Although EUR/CHF recovered part of its early losses, it remains hovering over the mid-1.0300s so far.
EUR/CHF plummeted to 0.8600 post-SNB
After three years, the SNB abandoned the 1.20 peg, allowing the Swiss franc to interact freely in the FX universe. Because of its fame of a safe haven currency, it’s rapidly appreciated against the single currency, sending the cross to test the 0.8600 handle, a historical high for the CHF, and is now looking to stabilize as the dust is finally settling.
In the opinion of Jane Foley, Senior Currency Strategist at Rabobank, “Even assuming that the SNB may have to intervene some more to help EUR/CHF stabilise, the deflationary risks facing Switzerland appear to have increased. In an environment in which low interest rates are no longer proving an effective tool to counter deflation, the failure of the SNB’s floor should be lamented by policy-makers who appear to be increasing running out of policy tools”.
EUR/CHF significant levels
At the moment the cross is losing 13.89% at 1.0341 with the next support at 1.0000 (psychological level) ahead of 0.8599 (low Jan.15 2001) and then 0.8000 (psychological level). On the upside, a break above the psychological mark at 1.2000 would aim for 1.2010 (high Jan.15) and finally 1.2039 (2015 high Jan.1).
EUR/CHF plummeted to 0.8600 post-SNB
After three years, the SNB abandoned the 1.20 peg, allowing the Swiss franc to interact freely in the FX universe. Because of its fame of a safe haven currency, it’s rapidly appreciated against the single currency, sending the cross to test the 0.8600 handle, a historical high for the CHF, and is now looking to stabilize as the dust is finally settling.
In the opinion of Jane Foley, Senior Currency Strategist at Rabobank, “Even assuming that the SNB may have to intervene some more to help EUR/CHF stabilise, the deflationary risks facing Switzerland appear to have increased. In an environment in which low interest rates are no longer proving an effective tool to counter deflation, the failure of the SNB’s floor should be lamented by policy-makers who appear to be increasing running out of policy tools”.
EUR/CHF significant levels
At the moment the cross is losing 13.89% at 1.0341 with the next support at 1.0000 (psychological level) ahead of 0.8599 (low Jan.15 2001) and then 0.8000 (psychological level). On the upside, a break above the psychological mark at 1.2000 would aim for 1.2010 (high Jan.15) and finally 1.2039 (2015 high Jan.1).