Strange movement in EUR/CHF in Asia session, a possible explanation

The Asian session was a risk-on session, it recovered  some of yesterday’s losses. After yesterday’s rather good HSBC services PMI, Shanghai Composite was up today by 1.97%. Therefore safe-havens like the yen and the Swissie were under pressure.

At first, some Forex traders interpreted the stronger Japanese current account as bullish. After some time they realized that both exports and imports were contracting. This is bullish for the yen, namely a slowing in the global economy and repatriation of the Japanese current account surplus into yen.

The remaining bullish sentiment of the risk-on session needed another safe-haven to be punished and this was the Swiss franc. Consequently the CHF/JPY fell strongly from 2:20 CET, 02:20 GMT on. This strong movement was potentially intensified by  first rumors about negative Swiss interest rates at State Street and BNY and low Asian volumes.

The Danish Krona, strangely, moved a lot later than Swiss franc, it was more or less in sync with the Bloomberg news about the negative interest at 6 am CET (4 am GMT).

About George Dorgan

George Dorgan (penname) predicted the end of the EUR/CHF peg at the CFA Society and at many occasions on SeekingAlpha.com and on this blog. Several Swiss and international financial advisors support the site. These firms aim to deliver independent advice from the often misleading mainstream of banks and asset managers. George is FinTech entrepreneur, financial author and alternative economist. He speak seven languages fluently.

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