Spot USD/CHF opened the New York market around 1.2065, plummeted quickly to 1.2008 after a series of soft US data snaps including low consumer confidence numbers, then backed back up as European leveraged accounts squared up. The post plummet peak was 1.2045, and the pair traded in an apprehensive 1.2025/40 range ahead of SNB board member Hildebrand"s speech entitled "Thoughts On The Swiss Franc Exchange Rate".
A headline that SNB Chairman Roth felt the market is "neglecting risk" was widely thought to refer to the carry trade was actually referencing equity investors, but unsettled the market nonetheless. Hildebrand asserted that the SNB would hike rates if the weak CHF fed through to inflation, however then backed off the carry trade issue, leaving traders dissatisfied, and USD/CHF to close around 1.2020.
Hildebrand's comments caused EUR/CHF to gyrate, as he referred specifically to EUR/CHF weakness early in the speech, then asserted that "There is no reason for monetary policy to react directly to the phenomenon of "carry trades". EUR/CHF fluctuated between 1.6371 and 1.6401 and closed unchanged at 1.6385.
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