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Looking into CHF

Discussion in 'Current Market Sentiments' started by fx-recommends, Jan 19, 2015.

  1. fx-recommends

    fx-recommends Content Contributor

    Aug 6, 2008
    Likes Received:
    You can see my dear reader that CHF has already appreciated following SNB's decision to drop 1.20 down ceiling of EURCHF which looked recently very costly, after the Swiss reserve reached CHF495b last December following CHF462.4b in last November on continued defending of that ceiling with growing expectations of watching QE in EU.
    Swiss National Bank Chief Jordan has signaled that the bank will be ready to intervene if it is needed and it looks that he means what he says after this unprecedented sudden appreciation.
    From another side he has said that over time holding CHF versus other currencies can be much more costly and I see that he is right and this can weigh on the CHF which has already appreciated by this excessive way which can be followed also by profit taken.
    The question can be what to buy against CHF right now and the preferred answer can be USD with better interest rate outlook and economic performance in US while the single currency can continue to be depressed by the QE plan which is looking ahead to come with a conditioned way with interest rate is expected to be near zero or even below it for supporting the EU economy by investment to come into the real economy.
    While what can make the CHF buoyed currently, after this massive way of rising can be only the safe haven demand and CHF then is not an attractive option with the current negative deposit rate which reached -0.75% and can be exposed to come down further with serious threats in the same time from SNB to intervene against further excessive CHF appreciation.
    I see even when we are to look for a safe haven option the greenback itself can be favored even, before the Japanese yen.
    While what can support the gold currently is mainly the dovish interest rate outlook which has been spurred by lower inflation outlook weighed on the US treasuries yields, as a result of the energy prices slide with relatively weaker economic activity globally and specially in EU.

    Kind Regards
    FX Market Strategist
    Walid Salah El Din
    Mob: +20 12 2465 9143
    E-Mail: mail@fx-recommends.com

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