Swiss franc exchange
Thu Lan Nguyen, strategist at Commerzbank, said: "We know from the intervention of Swiss National Bank that the Swiss franc has reached a key level, that is, the level that was intervened last year." "The central bank is likely to have entered the market and taken action."
According to the data of the Swiss National Bank in August last year, the bank injected billions of Swiss francs into the market and bought foreign currencies to curb the strength of the Swiss franc. The appreciation of the Swiss franc will make it more difficult for Swiss companies to export their products.
The Swiss National Bank stressed on Tuesday that the purpose of intervention was to curb the excessively strong Swiss franc. The Swiss National Bank disclosed in an annual report that the purpose of these interventions is not to give China a competitive advantage.
In the five years since the Swiss National Bank lifted the Swiss franc ceiling and introduced the negative interest rate policy, the strength of the Swiss franc means that it is almost impossible to end the negative interest rate policy in the short term.
After the U.S. decision on Monday, traders are prepared to deal with the fluctuation of the Swiss franc in the coming weeks. The one-month implied volatility of the euro against the Swiss franc rose to the highest level in nearly two months on Wednesday, rising by 1 1 basis point to 4.27%. Meanwhile, Manuel Oliveri, a strategist at Credit Agricole, advised against chasing Swiss francs.
Li Yingren, strategist of Mitsubishi UFJ Financial Group in London, said that the US decision "encourages market participants to test the willingness of the Swiss National Bank to continue to intervene to curb the strength of the Swiss franc." "We still believe that the Swiss National Bank will continue to intervene in the market after the US Treasury Department's statement, but it has caused certain uncertainty in the short term."
During the European session on Wednesday, the exchange rate of the Swiss franc against the euro was 1.438+07. The Swiss franc rose 0.2% against the US dollar to 0.9658.
Olivier Korber, strategist at Socié té Gé né rale, said: "We believe that the euro/Swiss franc falling below 1. 10 may be the trigger point for intervention and make the Swiss National Bank active again."
"A strong Swiss franc may pose a more severe challenge to the Swiss National Bank. The risk for the Bank of China now is that the market will test its ability to defend the further appreciation of the RMB. With the economic slowdown in the United States, the market demand for safe-haven currencies seems to have increased. The Japanese yen and the Swiss franc should be the main choices for these capital flows. "