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27 Sep 2013
SNB vindicated as EUR/CHF continues to test lows
FXstreet.com (London) - Swiss National Bank chairman Thomas Jordan’s comments on Monday supporting the central banks defence of the franc could not have been timed better.
Haven flows on US debt ceiling concerns have helped to push the Swiss franc to a seven and a half month low against the dollar, while it hit a three month high against the Euro, partly on rising bond yields.
It is now two years since the SNP intervened to put a CHF1.200 floor under the EUR/CHF rate. The then SNB chairman Philipp Hildebrand implemented the controls after haven flows threatened to overheat the currency and damaging Swiss domestic exporters.
As the US seems to be heading to another debt ceiling stand-off and Eurozone worries rear their head again, Jordan’s comments the KOF Swiss Economic Institute in Zurich on Monday have been given some support: "The minimum exchange rate remains an indispensable part of monetary policy, needed to limit downside risks."
"Even now the franc is still a highly valued currency," said the SNB chairman.
EUR/CHF has fallen to a low of of CHF1.2238 today, and could continue to test those lows heading into the US session.
USD/CHF has fallen further, down to lows of CHF0.9036, losing 0.7 percent.
Haven flows on US debt ceiling concerns have helped to push the Swiss franc to a seven and a half month low against the dollar, while it hit a three month high against the Euro, partly on rising bond yields.
It is now two years since the SNP intervened to put a CHF1.200 floor under the EUR/CHF rate. The then SNB chairman Philipp Hildebrand implemented the controls after haven flows threatened to overheat the currency and damaging Swiss domestic exporters.
As the US seems to be heading to another debt ceiling stand-off and Eurozone worries rear their head again, Jordan’s comments the KOF Swiss Economic Institute in Zurich on Monday have been given some support: "The minimum exchange rate remains an indispensable part of monetary policy, needed to limit downside risks."
"Even now the franc is still a highly valued currency," said the SNB chairman.
EUR/CHF has fallen to a low of of CHF1.2238 today, and could continue to test those lows heading into the US session.
USD/CHF has fallen further, down to lows of CHF0.9036, losing 0.7 percent.