SNB Might Have New EUR/CHF Target

There is growing speculation that the Swiss National Bank (SNB) has set a new target for the country’s currency, as the Swiss franc continues to tick lower against the euro.

Swiss newspaper Schweiz am Sonntag reported Sunday that the SNB was aiming to keep the Swissie trading between 1.05 – 1.10 euros ($1.19 – $1.24), citing sources with knowledge of the situation. It comes after the SNB shocked markets by dropping its three-year-old peg of 1.20 Swiss francs per euro on January 15.

Following the decision to scrap the peg, the Swiss franc soared around 30 percent against the euro, as investors piled into the currency which is traditionally seen as a “safe-haven.” The currency has been edging lower since the announcement, although it remained over 12 percent higher versus the euro on Monday morning.

New data on Monday also fueled talk that the central bank could be intervening once again, revealing that the amount of cash that banks hold with the SNB rose again last week. These “sight deposits” can be used by the central bank to intervene with its own currency.

A spokesperson for the SNB told CNBC that the bank does not comment on media reports.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza