18 Dec 2014
EUR/CHF rises after SNB sets negative interest rates
FXStreet (Córdoba) - The decision of the Swiss National Bank to introduce negative interest rates on sight deposit boosted EUR/CHF that jumped to 1.2094 reaching the highest price in two months but then pulled back trimming gains.
The pair currently trades at 1.2035, almost 30 pips above the level it had before the announcement but far from the highs, after making a 60-pips pullback.
SNB: negative rates and intervention
Thomas Jordan, Chairman of the Governing Board of the SNB said that they were obliged to ensure the EUR/CHF floor by intervening on the currency market in the last few days.
“We believe that the policy action (introduction of negative rates) will temporarily ease the selling pressures in EUR/CHF, however more steps will certainly be needed to defend the floor if the ECB moves toward a full-blown QE by the first quarter of 2015. This is just a beginning, there is certainly more to come”, explained Ipek Ozkardeskaya, Market Analyst at Swissquote Bank.
The pair currently trades at 1.2035, almost 30 pips above the level it had before the announcement but far from the highs, after making a 60-pips pullback.
SNB: negative rates and intervention
Thomas Jordan, Chairman of the Governing Board of the SNB said that they were obliged to ensure the EUR/CHF floor by intervening on the currency market in the last few days.
“We believe that the policy action (introduction of negative rates) will temporarily ease the selling pressures in EUR/CHF, however more steps will certainly be needed to defend the floor if the ECB moves toward a full-blown QE by the first quarter of 2015. This is just a beginning, there is certainly more to come”, explained Ipek Ozkardeskaya, Market Analyst at Swissquote Bank.