SNB In Trouble as it Holds 1.2000 EURCHF Floor

Will they, won’t they? That is a popular question among Forex traders in regards to whether the SNB will continue to hold the 1.2000 price floor in the EURCHF.  I’ve said it in the past and continue to believe that the SNB will stick to 1.2000 until at least September, but it’s time that the SNB finds another policy to support its own economy.   Forget about the current situation where the SNB has been buying billion and billions of Euro’s, even as the ECB and EU are out to weaken their currency.  The SNB needs to step back and look at the longer term picture of the Euro.

A picture is worth a thousand words, so I figured we’ll just start with these charts to make a point:

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Video: SNB Meeting Review + EURUSD Trading Today

Rather than just talk about it, posted a Video on today's SNB Meeting and the potential effects on the EURCHF.  I also through in a few tidbits about the EURUSD and today's fall and run up back above 1.2600.

SNB Meeting Preview: Will the 1.2000 EURCHF Price Floor Be Raised?

Here we go again, the much anticipated Swiss National Bank Interest Rate Meeting is tomorrow (Thursday) morning. For Forex traders, there is really only one question that matters and that is whether the SNB will change the 1.2000 EURCHF price floor.

Two weeks ago we saw chatter of the SNB applying other measures to weaken the Swiss franc, such as moving towards negative interest rates or taxes on franc denominated deposits. But other than the quick spike earlier in the month the 1.2080, the EURCHF has traded pretty much around 1.2010. This shows that even were the SNB to make such changes, it isn’t expected to do much to thwart the rate of flows into the Swiss franc. Also as noted by Zero Hedge earlier this week, the continued rotation of Euro holders in francs has led Swiss bond prices to surge, with negative yields on all short term debt up to 5 years out. So we’ve pretty much are seeing negative rates for a while anyway, without it having much of an impact.

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EURCHF Gone Wild, SNB Starting Rumors?

Source: Flickr Commons (click for site)Things finally got interesting today in the flat line that is otherwise known as the EURCHF. The pair spiked to a high of 1.2074 on reports that.... well, take your pick. We’ve got word of a fat finger trade from a London trader (no, not JP Morgan, spot Forex isn’t their thing). Rumors that Switzerland will apply taxes on Swiss franc denominated deposits to curb demand for the currency (this isn’t a new idea, as the SNB suggested applying negative interest rates in 2011). And of course the last and most basic approach is that the SNB was simply in the market selling francs to stir things up.

Since the initial moves higher, the pair has settled back around 1.2025, which if you were like me and arrived late on the scene, is still a whopping 15 pip move higher (in recent EURCHF terms, 15 pips is like 250 pips of anything else).

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Forex Trading Analysis - SNB’s Jordan Speaks, EURCHF Stands Still

EURCHF! Like Watching Paint DryAs expected yesterday, Swiss National Bank Chairman Thomas Jordan at the Etavis Group and yielded no surprises. JP Morgan’s Forex Research team summed up the speech in one sentence “SNB Jordan said that the franc remains overvalued even after policy makers imposed a currency ceiling.” That pretty much sums up the SNB’s position that they will keep their currency floor in place until either the Euro strengthens (not happening), or the overall global economy picks up enough to allow Swiss companies deal better with a strong franc (happening gradually).

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