Swiss Franc May Decline On SNB Interventions

After the SNB stated its position against further advances of its national currency, the Swiss Franc may be poised to decline versus main currencies, as fears of interventions are likely to shun investors from investing in the franc-priced assets.

The Swiss franc gained during the late months of the last year versus the euro and the dollar, posting its highest monthly advance in December versus the European single currency in 2009, and trading in parity with the greenback in November, as the Swiss economy showed its strength and resilience, and declining odds of deflation were interpreted as a good chance for the currency to gain in foreign-exchange markets. Today, after months of silence, the Swiss National Bank stated through its officials that its currency appreciation would have been gone to far, and that further fluctuations of the Swiss franc will be monitored by central bankers, indicating that a further advance of the franc may be halted by more than just verbal interventions.

Speculations regarding future interventions in the Swiss currency rates open a good trading possibility for selling the franc versus other currencies, specially higher-yielding ones, as SNB’s position took today will not allow the franc to advance much further, declining attractiveness for the franc among the main currency pairs.

USD/CHF traded at 1.0169 as of 00:49 GMT from 1.0140 in the intraday, being rather unchanged following the SNB statement.

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