There seems to be no escape for the low yielding Swissie and the return to the carry trade has forced the unit onto the back-foot into the European morning. This comes despite the Dollar hitting fresh multi-year lows against the better paying Euro. Carry trades have come back into favor since the comments late on Thursday from a German official "many are comfortable with Euro strength".
Swiss data has been overlooked as a 25bp Q2 hike from the SNB has largely been priced in and as a result USD/CHF has headed higher with offers into 1.2060/65 soon absorbed. The break into the 1.2070's is reported to have removed stops with 1.2076 printing as these caused a slight liquidity vacuum.
Should the higher levels be cemented then a slow drift towards 1.2090 can be expected with the next big test coming into the 1.2100 area. Against the Euro the Franc has also struggled on fresh CHF shorting. EUR/CHF has broken above 1.6425/30 to hit 1.6436 and the all-time high at 1.6468 should come back into view if the cross can force a break above 1.6450 standing supply.
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