EUR/CHF: A History of Interventions, December 2009

EUR/CHF is down at 1.4835 from an early 1.4865, the swissy bulls happy to probe for signs of meaningful SNB interest.  Many are voicing surprise at the lack of interest being show by the Swiss National Bank to curtail the recent burgeoning swissy strength.

There is talk of 1.4800 barrier option interest. If we move lower from present levels we could well see some protection of said level.  Also it should be noted that some feel 1.4800 could possibly be the line in the sand the SNB has drawn.

Given the extremely illiquid market conditions, one can only imagine the impact a bout of SNB/BIS intervention would have.

Swiss KOF leading indicator for December has come in at 1.68, up from unrevised 1.62 in November but below median forecast of 1.70.

EUR/CHF sits at 1.4880, unchanged on the day.

Much of the volatility in the market in recent days has come from the normally staid EUR/CHF. Despite a lot of the big banks recommending longs above 1.4950 on Friday last, the market opened below 1.4880 in the interbank market and is still around the same level. Political tensions between Iraq/Iran and heavy stops are again the major triggers. USD/CHF is trading at 1.0400.

“This news is not true. This field is disputed and now it is neglected by both sides. There was no storming of the field. It’s empty, it;s abandoned, it is exactly on the border between Itaq and Iran,” Deputy oil minister al-Khafjai told Reuters.

So sayeth the Iraqi oil ministry on the reports earlier of an Iranian military move into an Iraqi oil field.

The Pakistani coup rumors turned out to be false as well but clearly the market is quite attuned to geopolitical jitters today.

EUR/CHF, the geopolitical barometer, plunged overnight and remains pressured, now at 1.4965.

UBS have apparently gone long  EUR/CHF at  1.4950, target 1.5250, stop 1.4890.

The bank is looking for the SNB to intervene in the cross.

EUR/CHF presently at 1.4985, up from overnight low of 1.4911.

This rumour has now been denied but too late to save all those stops.

EUR/CHF was the main trigger this time but it has thankfully rebounded some after a 100 pip fall. The risk-aversion trade of selling the EUR and the AUD against the USD, JPY, CHF and even the GBP (how things have changed!) is in full flow today. As mentioned in the comments below, there looks to be a very strong bid at 1.4300 in the EUR/USD and that is stabilising the market. Also as I’ve mentioned a few times earlier, watch out for trailing stops above .8920 in the AUD/USD which may come under scrutiny in these thin and volatile markets.

Poor liquidity and big stops equals panic. EUR/CHF fell 100 pips in a few minutes.

EUR/CHF has opened lower, down at .1.5070 compared to a North American close Wednesday up around 1.5090, the cross pressured by the general accelerated euro weakness.

Will be interesting to see what the SNB makes of the latest  slippage given ongoing rhetoric that it will intervene to negate any accelerated swiss strength in the EUR/CHF cross.

• Sees moderate positive Swiss GDP growth in 2010, no recession but not strong growth
• Inflation outlook improved, but could run deflation risk again if crisis resurges
• Banks will likely face further writedowns in 2010
• Rates close to zero not compatible with price stability in long-term
• Cannot name the hour and day of exit strategy ahead of time
• Yuan link to dollar a source of concern, China should have independent currency

EUR/CHF sits at 1.5085, pretty much where it started the European day.

Swiss Q-3 GDP has come in at +0.3% q/q, -1.3% y/y, slightly better than median forecasts of +0.2%, -1.5% respectively.

EUR/CHF steady at 1.5080.