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27 Mar 2015
SNB keeps looking to ‘unconventional’ methods regarding strong CHF – Danske Bank
FXStreet (Edinburgh) - In the opinion of Christin Tuxen, Senior Analyst at Danske Bank, recent comments by SNB officials remarked the possibility of further actions by the SNB in order to quell the franc’s strength.
Key Quotes
“The two speeches from SNB board members last night are also worth noting”.
“Board member Zurbrügg said after commenting on the discontinuation of the EUR/CHF floor that negative rates are having the desired effect in Switzerland and that rates will take a more prominent role in monetary policy”.
“However, he did reiterate the SNB’s stance that the CHF is significantly overvalued and that it should weaken over time and that the SNB will continue to intervene as deemed necessary”.
“Notably he twice made references to the effective CHF rate, which may fuel speculation that the SNB is looking at the CHF against a basket of currencies now”.
“The fact that Zurbrügg reiterated comments from alternate board member, Thomas Moser, earlier this week that the SNB is looking at the IMF suggestion of buying foreign-currency assets, suggests that the SNB is not in pure wait-and-see mode as last week’s meeting may have suggested”.
“Also, at the same event yesterday, another alternate board member, Dewet Moser, said that the SNB will ‘continue to deploy unconventional methods’ to fight CHF strength”.
Key Quotes
“The two speeches from SNB board members last night are also worth noting”.
“Board member Zurbrügg said after commenting on the discontinuation of the EUR/CHF floor that negative rates are having the desired effect in Switzerland and that rates will take a more prominent role in monetary policy”.
“However, he did reiterate the SNB’s stance that the CHF is significantly overvalued and that it should weaken over time and that the SNB will continue to intervene as deemed necessary”.
“Notably he twice made references to the effective CHF rate, which may fuel speculation that the SNB is looking at the CHF against a basket of currencies now”.
“The fact that Zurbrügg reiterated comments from alternate board member, Thomas Moser, earlier this week that the SNB is looking at the IMF suggestion of buying foreign-currency assets, suggests that the SNB is not in pure wait-and-see mode as last week’s meeting may have suggested”.
“Also, at the same event yesterday, another alternate board member, Dewet Moser, said that the SNB will ‘continue to deploy unconventional methods’ to fight CHF strength”.