27 Jan 2015
EUR/CHF may stabilise near 1.02 levels – Rabobank
FXStreet (Barcelona) - Jane Foley, Senior Currency Strategist at Rabobank, expects EUR/CHF might stabilise in the 1.02 area in the next 3 months, with the pair making a high at 1.0380 post SNB’s Danthine’s comments that the central bank was willing to intervene to offset CHF strength.
Key Quotes
“EUR/CHF has traded as high as the 1.0380 area this morning, the firmest level since January 15 which was the day the SNB stepped away from the EUR/CHF1.20 floor. The respite for the CHF coincides with comments from SNB vice president Danthine who reiterate that the SNB is willing to intervene in the market to offset CHF strength. These comments are well timed and may have exaggerated the move higher in EUR/CHF this morning.”
“For the most part, however, the move higher in EUR/CHF appears to be a reaction to short-covering in the EUR ahead of this week’s FOMC.”
“If the SNB are intervening in the market, it would achieve greatest ‘bang for its buck’ by accentuating an existing trend.”
“A less hawkish Fed this week and an adjustment higher in the EUR/USD would potentially allow the SNB a little more traction in moving the EUR/CHF cross rate higher. That said, the SNB would be battling against a very dovish ECB.”
“We see the potential for EUR/CHF to stabilise in the 1.02 area on a 3 mth view, but concede that the outlook for EUR/CHF is still very fluid.”
Key Quotes
“EUR/CHF has traded as high as the 1.0380 area this morning, the firmest level since January 15 which was the day the SNB stepped away from the EUR/CHF1.20 floor. The respite for the CHF coincides with comments from SNB vice president Danthine who reiterate that the SNB is willing to intervene in the market to offset CHF strength. These comments are well timed and may have exaggerated the move higher in EUR/CHF this morning.”
“For the most part, however, the move higher in EUR/CHF appears to be a reaction to short-covering in the EUR ahead of this week’s FOMC.”
“If the SNB are intervening in the market, it would achieve greatest ‘bang for its buck’ by accentuating an existing trend.”
“A less hawkish Fed this week and an adjustment higher in the EUR/USD would potentially allow the SNB a little more traction in moving the EUR/CHF cross rate higher. That said, the SNB would be battling against a very dovish ECB.”
“We see the potential for EUR/CHF to stabilise in the 1.02 area on a 3 mth view, but concede that the outlook for EUR/CHF is still very fluid.”