FXStreet (Edinburgh) – Strategist at RBS Melinda Burgess gave her opinions on the recent demand for the Swiss franc and the role of the SNB.
Key Quotes
“The Swiss National Bank intervened last week to stabilise the CHF as pressure on the currency intensified following Greece’s referendum announcement”.
“While safe haven flows can provide more support for the CHF, the SNB has shown a preparedness to be both vocal and proactive in stemming CHF appreciation”.
“The rebound in the PMI data last week provides some hope that the economy may be weathering the stronger exchange rate better than expected”.
“However, weakness in the KOF lead indicator and comments from both the Swiss government and SNB Chair Jordan around the prospects for weak economic activity over coming quarters, suggest that the SNB will continue to resist a stronger exchange rate”.
“This may dampen further safe-haven demand for the CHF and see some underperformance versus USD, JPY and GBP”.
“However, CHF may continue to outperform other European currencies and commodity FX while Greek worries limit appetite for risk”.
(Market News Provided by FXstreet)