Franc Rises, Will SNB Intervention Follow?

The Swiss franc rose against the US dollar amid speculations that Greece is struggling to persuade creditors into forgiving part of the nation’s debt. The currency was falling against the euro and the yen on prospects for Swiss central bank’s intervention, but closed almost unchanged.

George Saravelos, a foreign-exchange strategist at Deutsche Bank, explained:

Central bank intervention could emerge any day now given where we are. How they act will influence the way investors think they will intervene going forward.

Indeed, the franc is near the cap set by the Swiss National Bank and the bank may come out with another intervention any day.
Jean-Pierre Danthine, Member of the SNB Governing Board, reiterated at the press conference on January 24 that the bank plans to keep the Swiss currency weaker:

The SNB will thus continue to enforce the minimum rate with the utmost determination and remains prepared to buy foreign currency in unlimited quantities. The Swiss franc is still highly valued, but it should depreciate further in the future.

USD/CHF as down from 0.9202 to 0.9121. EUR/CHF closed at 1.2057 after opening at 1.2061 and rising to 1.2085. CHF/JPY closed at 83.97, following the drop from 84.11 to 83.35.

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