Swiss National Bank Ends EUR/CHF Cap

Barbara Zigah

Earlier today, the Swiss National Bank surprised FX markets by dropping its 3-year long cap against the Euro, resulting in an initial 30% surge in the Swiss Franc’s value. Some economists are saying that the SNB’s move is a risky one, given that the intent, albeit temporary, was meant to protect Switzerland’s economy, Last month, the SNB had said it needed to defend the cap as growing worries about the Eurozone’s economy and the crisis in Russia sent investors flocking to the Swiss Franc as their safe haven currency choice.

With the 1:20 Swiss Francs cap a thing of the past, the Swiss Franc quickly appreciated. As reported at 10:26 a.m. (GMT) in London the EUR/CHF was trading lower at 1.0292 Swiss Francs, a loss of 14.29% and recovering from the earlier session low of 1.0155 Swiss Francs, a likely knee jerk reaction to the SNB surprise. The USD/CHF was also lower at 0.8798 Swiss Francs.

Dollar Pressured by Disappointing Data

In the United States, a disappointment in the recently released retail sales figures put the greenback under pressure; retail sales hit an 11-month low for December, and that resulted in investors speculating that the Federal Reserve might push back its plans to raise interest rates later this year. In somewhat volatile trading, the EUR/USD pair was trading at $1.1728, below the midway point of the pair’s range between the session low of $1.1571 and peak of $1.1790.

Barbara Zigah

After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Sample