Speculation of a more aggressive SNB move on Thursday has kept the Franc supported today. USD/CHF worked a tight 1.2240/60 range for the majority of both the Asian and European sessions. Into North America and the downside was opened up and a run back towards 1.2210 and 1.2200 is now looked for.
However, dealers sound a note of caution that if EUR/USD fails to break above 1.3200/05 then EUR/CHF will need to break below 1.6100 to signal that further Franc strength is sustainable. US data is seen as key to the directional bias set for North American trading. Retail sales numbers for February are first up at 12:30 GMT (+0.3% expected), followed by Consumer Confidence at 14:00 GMT. Elsewhere, the latest reading of the UBS Risk Aversion Index shows it unchanged at +22.
The index has sat in so-called "risk neutral territory" since Monday as players await the next set of global indicators. The bank also noted in their research that emerging market spreads over US Treasury yields have widened and gold appreciated in USD terms while bonds outperformed stocks.
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