EUR/CHF Tanks After SNB Comments

Like Florida weather, the Swiss National Bank can’t make up their mind about whether they want to intervene in the currency market or not. Last week, the Swiss franc collapsed after SNB Vice President Hildebrand said point blank that “they could also intervene in the currency markets to prevent “renewed appreciation” of the franc. This morning SNB Roth shot down speculation about intervention by saying that he has yet to see the franc “overshoot” and there is no need for the central bank to intervene.

Physical intervention by the SNB was very unlikely since the central bank once did a study touting the effectiveness of verbal intervention. Furthermore, a study in 2003 revealed that the interventions of the SNB to strengthen the Swiss franc were more effective than its interventions to weaken the Swiss

The SNB also signaled this morning that rate cuts are over. Roth said that monetary policy is currently “appropriate.”

These comments have taken the air out of EUR/CHF and will probably drive it back towards 1.4825.


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About Kathy Lien 235 Articles

Kathy Lien is an Internationally Published Author and Chief Strategist of, one of the world’s most popular online websites for currency research. Her trading books include the highly acclaimed, Day Trading the Currency Market: Technical and Fundamental Strategies to Profit form Market Swings (2005, Wiley); High Probability Trading Setups for the Currency Market E-Book (2006, Investopedia); and Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game (2007, Wiley). As Chief Currency Strategist at FXCM, Kathy is responsible for providing research and analysis for DailyFX, the research arm of FXCM. She also co-edits the BK Forex Advisor, an Premium Service with Boris Schlossberg – one of the few investment advisory letters focusing strictly on the 2 Trillion/day FX market.

Kathy is also one of the authors of Investopedia’s Forex Education section and has written for, the Asia Times Online, Stocks & Commodities Magazine, MarketWatch, ActiveTrader Magazine, Currency Trader, Futures Magazine and SFO. She is frequently quoted by Bloomberg, Reuters, the Wall street Journal, and the International Herald Tribune and has appeared on CNN, CNBC, CBS and Bloomberg Radio. She has also hosted trader chats on EliteTrader, eSignal and FXStreet, sharing her expertise in both technical and fundamental analysis.

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