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15 Jan 2015
EUR/CHF breaks parity again
FXStreet (Bali) - In an unprecedented move, which throws SNB credibility out of the window, the Central Bank decided to announce an end to its 1.20 EUR/CHF protective floor, while cutting interest rates to -0.75% .
The black swan event led to liquidity vanishing from trading platforms as the SNB was no longer the buyer of last resort just above 1.20, with the EUR/CHF exchange rate trading as low as sub 0.80 before a rebound towards 1.0550, as liquidity re-entered the market. However, it has been a bleed lower from there, and the Swiss Franc is again breaking parity vs the Euro, presently at 0.9979.
Sean Lee, Founder at FXWW, notes: "Big global macro positions will trigger trades after the NY close. Hence move lower in EUR/CHF last few minutes. Might get very nasty in Twilight zone." There are reports that large bids lie around parity levels via SNB purchases in order to protect a minimum rate.
The black swan event led to liquidity vanishing from trading platforms as the SNB was no longer the buyer of last resort just above 1.20, with the EUR/CHF exchange rate trading as low as sub 0.80 before a rebound towards 1.0550, as liquidity re-entered the market. However, it has been a bleed lower from there, and the Swiss Franc is again breaking parity vs the Euro, presently at 0.9979.
Sean Lee, Founder at FXWW, notes: "Big global macro positions will trigger trades after the NY close. Hence move lower in EUR/CHF last few minutes. Might get very nasty in Twilight zone." There are reports that large bids lie around parity levels via SNB purchases in order to protect a minimum rate.