The latest US data has dented the USD and the Franc has finally managed to take advantage with the break below 1.59 in EUR/CHF highlighting the push towards renewed Franc strength. Stops have triggered since the break below 1.2050 and the option barriers into 1.20 removed as the push continues. Trading is now attempting to consolidate the move lower but dealers also cite the need for EUR/CHF to continue to hold sub-1.59.
Stops have also triggered in the EUR cross in the move lower with technicians now pointing towards the need for trading to best the daily low from yesterday at 1.5868. Dealers in NY reference the UK's Telegraph article (pB9) on heeding the danger in the carry trade. The article quotes the already much maligned Roth comments that call for "prudence" and cite the potential risks in exchange and transaction costs.
The news may not be that current but it is always worth remembering the statistics that more than 80% of new mortgages out of many eastern European states are undertaken in Francs.
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