Tag Archives: FX Trends

Swiss Franc Sterling vs the Swiss Franc has remained close to its lowest level in history caused by the aftermath of the Brexit vote back in June and more recently the announcement that Article 50 will be triggered by March 2017. Confidence in Sterling exchange rates has plummeted recently and until we get some form of assurances as to how the talks may go with the European Union we could see Sterling fall even...

Summary: Fitch cut Italy’s rating outlook to negative from stable, while DBRS left Portugal’s rating and outlook unchanged. Europe and Canada’s free trade negotiations broke down, but many seem to be making exaggerating the significance of the drama. Japan and Australia report inflation figures, and both are exceptions to the generalization that price pressures are rising in (most) high income countries. There...

Summary: Fitch cut Italy’s rating outlook to negative from stable, while DBRS left Portugal’s rating and outlook unchanged. Europe and Canada’s free trade negotiations broke down, but many seem to be making exaggerating the significance of the drama. Japan and Australia report inflation figures, and both are exceptions to the generalization that price pressures are rising in (most) high income countries....

The net short Swiss Franc position against the dollar has risen to levels seen before the breakdown of the EUR/CHF floor. Short CHF has increased from short 9.4 K contracts to 16.4 K contracts. Before the end of the peg, in December 2014, speculators  were short CHF by 20-25 K contracts. This big short position got repeated only once at the end of 2015, when the Fed was supposed to hike rates, but finally did not....

Swiss Franc Currency Index The Swiss Franc index was lagging once again compared to the dollar index. The dollar index is up exactly 3% this month, while the CHF index is down 2%. The EUR/CHF has reached the SNB intervention area at the “new floor area of 1.08 to 1.0850. On Monday we will learn about the latest SNB interventions in our weekly sight deposits. Trade-weighted index Swiss Franc, October 22 2016(see...

Summary: The hangover from the debt crisis and secular stagnation are the two main explanatory models for the low growth and low interest rates. Anew Fed paper brings the focus back to demographics. If true, warns of a protracted period of slow growth, low interest rates. There are two main interpretative frameworks that seek to explain the slow growth and low interest rates. The first is associated with...

Swiss Franc The EUR/CHF ended the evening at 1.0810. The question is if the SNB was intervening or not. We are convinced that the “new floor” is the area between 1.08 and 1.0850. Hence there should be stronger interventions going on. EUR/CHF - Euro Swiss Franc, October 21 2016(see more posts on EUR/CHF, ). - Click to enlarge FX Rates The US dollar is firm especially against the European complex and emerging...

This afternoon I had the privilege of being on Bloomberg TV, with anchors Scarlet Fu and Matt Miller. I was joined by an old market friend Bob Sinche. We had a lively discussion (what did you expect?) on two issues. The first was on the ECB. At his press conference earlier today, Draghi indicated that the question of extending QE and tapering was not discussed.  Bob argued that this was disingenuous. Of course it is...

Swiss Franc EUR/CHF - Euro Swiss Franc, October 20 2016(see more posts on EUR/CHF, ). - Click to enlarge GBP/CHF rates have fallen dramatically over the past month, as Sterling continues to find itself under pressure against the major currencies. However, despite these losses it is not all doom and gloom for those clients holding GBP, as Tuesday’s positive spike for the Pound proved. Currency does not move in a...

Summary: Extending or tapering QE was not discussed, but means little in terms of what the ECB decides in Sept. Draghi said growth risks are on the downside and inflation has yet to enter a meaningful uptrend. Reiterates that abrupt end of purchases is unlikely. ECB President Draghi said nothing to dampen expectations that in December, with the cover of new staff forecasts, the asset purchase program will...