USD/CHF opened in New York around 1.2235 and slipped off the face of the earth, assaulted by a combination of risk aversion, carry trade liquidation, falling stock markets, and declining US Treasury yields. The catalyst was the China meltdown which set a negative tone on global markets, and with the US being the largest global market, negativity had a larger cumulative effect; knocking the stuffing out of the Dow, the S&P, and the Nasdaq - all down 3%.
Latin American markets also got clobbered, lending a generally soft tone to the hemisphere. USD/CHF swooned after poor US durable goods data (-7.8%) had a brief reprise on existing home sales (6,640 vs 6,300 median) then just melted, the close was 1.2175, after a volatile last half hour that saw 1.2145 trade. Carry trade liquidation drove Swissy higher against everything other than JPY.
EUR/CHF closed down 60pts at 1.6120; GBP/CHF closed down 160pts at 2.3875; CAD/CHF closed down a big figure at 1.0435; CHF/JPY the lone standout closed at 96.85, down 65pts. The SNB and BOJ have been warning of a carry trade liquidation, and after many months it has finally arrived.
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