The unwinding of carry trades, in what some tip as a pre-Japanese year-end (Mar 31st) move, has helped the Swissie garner further support overnight. The CHF strengthened across the board into European trading but against a slight US unit fight back USD/CHF has managed to bounce.
Offers into 1.2175 failed to cap the rebound but sales ahead of the 1.2190 mark left the topside limited with speculation also noting Swiss name sales into the 1.2220 area in very good size with more stops seen above. Dealers also cite a host of other factors behind the underpinning of the CHF. The near 2% drop in the Dow Jones Index overnight and the impending SNB rate verdict have helped the unit stay bid across the board.
The market still prices in a 25bp hike from Roth but some remain of the opinion that a more aggressive move is not totally out of the question on Thursday. However, the recent publication of a fresh low in the March Swiss ZEW investor sentiment index has left the Franc struggling for traction into early North American trading.
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