By: Barbara Zigah
Following a week of exceptional volatility in the equity and forex markets, the trend appears to be continuing. In early Asian trading, the common currency Euro and the U.S. Dollar rose against the Swiss Franc as investors proceed cautiously, in the even the Swiss National Bank follows through on its intervention threat. Most recently, comments made last week by the SNB that the central bank’s policymakers are considering pegging the Swiss currency to the Euro are sufficiently worrying to keep the save haven currency suppressed. According to a weekend media report, the SNB was poised to peg the pair at 1.10 Swiss Francs per Euro.
The common currency Euro climbed to a 2-week high, trading at 1.1294 Swiss Francs in early Asian trade, up from late Friday’s trade in New York at 1.1079 Swiss Francs. The U.S. Dollar also struck a 2-week high, trading at 0.7914 Swiss Francs, off o the 0.7771 Swiss Francs from New York trading on Friday. Most recently, the USD/CHF pair was trading higher at 0.7954 Swiss Francs, while the EUR/CHF pair was higher at 1.1380.
One currency strategist believes that the Swiss Franc could downtrend in the short term, especially given investors’ worry of the pegging possibility, but will likely rally again later in the week.