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Feb 21 - 07:55 AM

EUR/CHF - COMMENT-Good Cop? SNB May Keep EUR/CHF On Straight And Narrow

By Rob Howard  —  Feb 21 - 05:35 AM

Feb 21 (Reuters) - EUR/CHF might be in for a calm few months, courtesy of Swiss National Bank currency guidance alongside its Monday disclosure that it is "still willing" to be active on the foreign currency markets.

"If the Swiss franc depreciates we are ready to sell foreign exchange, if the Swiss franc appreciates strongly we are willing to buy foreign exchange" said SNB Vice Chairman Martin Schlegel.

In practice, this means the risk of SNB intervention to sell EUR/CHF will rise the higher the cross might go; i.e.
towards 1.02-1.05.
EUR/CHF was last at 1.05 in June last year -- before the franc soared after the SNB unexpectedly raised interest rates to fight inflation (Swiss inflation rose to a higher than expected 3.3% last month).

The SNB might also intervene and buy EUR/CHF if it drops towards 0.9420 (last September's seven-and-a-half year low).

Related comments: nL1N33X0MUnL1N3510I3

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