The increase in SNB rhetoric over the last few days has spurred the Q2 50bp debate but some in the market have gone as far as to call for an emergency rate hike to combat Swiss Franc weakness. The Franc rallied into European trading on such talk but local names continue to suggest that more aggressive mores are unlikely.
USD/CHF was sold back from 1.2293 to 1.2260 while EUR/CHF dropped back below 1.65 to print a fresh intraday low at 1.6475. The CHF consolidated its gains ahead of the KoF data but the upbeat 2.00 speculation failed to come to fruition. Instead the May leading indicator came in close to expectations at 1.96 to leave both USD/CHF and EUR/CHF little changed.
Offers in the cross into the figure look to cap rebounds while bids in USD/CHF are seen back from 1.2250 to 1.2240 to protect the sub-40 stops. Looking ahead, and the event-risk profile is generated by the 14:00 GMT existing home sales for April and the 14:30 GMT ECRI weekly index of economic activity for May 18th. Should the Dollar strengthen then offers into the 1.2300's will once again be looked for.
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