FXStreet (Guatemala) – Omkar Godbole, Editor and Analyst, at FXStreet noted that the Greek deal appears still far away and the June 30 deadline would most likely be put to test and said, consequently, we are likely to see the safe haven Swiss Franc continue to receive fresh bids.
Key Quotes:
“The safe haven trade may intensify further into the next week in case the deadlock persists, especially since the EUR is likely to be sold as we move closer to June 30 deadline. A sharp sell-off in the EUR would only add to the bids on the CHF.”
“Furthermore, the British Pound also stands to lose in case of a Greek led risk aversion in the financial markets.”
“The Greece issue is still playing itself out. Amid all the chaos and rumours surrounding the deal/no deal, any kind of intervention from the SNB to halt appreciation of in the CHF is unlikely to have a lasting impact. Hence, surprise rate cuts on the part of SNB or stealth interventions are unlikely so long as the Greece issue lingers.”
“Verbal interventions are likely, although we did not see it having any impact on the CHF today, after SNB’s Jordan expressed readiness to act if the CHF continues to strengthen. However, Jordan also acknowledged the fact that CHF is being favoured as a safe haven currency, indirectly stating that the bank would like the Greece issue play itself out before making a move. Consequently, the doors are wide open for the CHF to extend gains against major European currencies including the GBP.”
“On account of these factors, the GBP/CHF pair could witness a failure to take out 1.4598 on weekly chart and begin its slide to 1.4350 next week. Still, the bearish idea is at a risk of quick-fix short-term solution to Greece issue ahead of June 30. Such an event could easily result in GBP appreciation (as EUR rallies) and CHF depreciation (loss of safe haven appeal and EUR rally), taking the GBP/CHF pair above 1.4708 (Apr. 29 high).”
(Market News Provided by FXstreet)