It is like coming back to 2011/12 when Swiss economy was experiencing massive inflows out of Euro zone into its banks and bonds.
However that situation subsided as Swiss national bank deployed 1.20 floor against Euro and European Central Bank (ECB) took measure such as Long term refinancing operation (LTRO), outright monetary transaction (OMT) to curb the crisis during 2011/12.
Now in 2015, with the Euro-Franc floor removed and ECB deployed all of its near term monetary policy there are little on the way of Euro-Franc exchange rate, which has awaken the volatility in the pair.
Euro-Franc is the best pair to trade Euro zone (Greece vs. Eurozone) crisis.
- Both central banks are very dovish on monetary policy and most of their policies have been priced in.
Euro today ahead of FED meeting and tomorrow’s finance ministers’ meeting dropped sharply against Franc from 1.049 to 1.04 in Asian hours. Recovered somewhat from there, however still remain under pressure, currently trading at 1.045.
Positive news have been pushing Euro higher against franc, since no resolution has yet arrived Franc remains capped below 1.055 against Franc.
No resolution by end of month is likely to push Euro below parity against Franc, however positive outcome might push it around 1.08-1.1.
The material has been provided by InstaForex Company – www.instaforex.com