In the wake of the SNB reserve theme from Friday the weekend saw comments from the Swiss Central Bank Dept. Chairman, Hildebrand. Talking to domestic newspaper, SonntagsZeitung, he noted that the current development (i.e. the weaker CHF) was a "conundrum" as the Swiss economy remained stable.
Hildebrand went on to utter a word of warning that markets "should not assume exchange rates would stay as stable as they have in recent years" and that players should "think about hedging some strategies". However, on the notion of the carry trade the central banker relented and said that it was up to the markets to decide on there best use while on interest rates he is quoted as suggesting "rates will continue to increase if Swiss growth remains robust".
Swiss players themselves do not see any change in stance from the comments, they continue to downplay the chances of intervention and look for a further SNB rate hike in Q4 (mid-Dec) by 25bps. Into the new week and the Franc has rallied but with the Dollar stalling near recent lows USD/CHF has been forced to trade close to the 1.2500 mark.
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