MUFG Research discusses CHF outlook and sees a scope for further gains in the near-term."The best performing G10 curr
MUFG Research discusses CHF outlook and sees a scope for further gains in the near-term.
“The best performing G10 currency so far this week has been the Swiss
franc. It has benefitted alongside the other safe haven currencies of
the yen and US dollar from the sharp US equity market sell-off
overnight. The main trigger though for the reversal of recent
Swiss franc weakness were the comments yesterday from SNB President
Jordan who signalled that the SNB is ready to act if inflation pressures
continue. It was the strongest signal yet from the SNB that
they are starting to more seriously consider tightening monetary policy
in response to upside risks to inflation,” MUFG notes.
“The hawkish SNB comments contributed to the sharp reversal higher for the CHF.
EUR/CHF has dropped back towards the 1.0300-level after failing again
to break above the 200-day moving average at around 1.0490. He did still
signal as well that the SNB remains ready to intervene to weaken the
Swiss franc but must watch inflation elsewhere. Sight deposits at the
SNB have risen notably since the Ukraine conflict started suggesting
that intervention has been stepped up,” MUFG ads.
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