1 Dec 2014
Credibility of EUR/CHF floor maintained – BTMU
FXStreet (Barcelona) - Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, notes that the rejection of the ‘Save our Swiss Gold’ proposal has preserved the credibility of the EUR/CHF floor.
Key Quotes
“The prices of gold and other precious metals have been involved in the sell-off overnight as well. The price of gold has been negatively impacted by the announcement over the weekend that the Swiss public had rejected the “Save our Swiss Gold” proposal in a referendum which would have stipulated that the SNB hold at least 20% of its balance sheet in gold. The proposal was voted down overwhelming by 77% to 23%.”
“The two other initiatives on tax privileges for foreign millionaires and immigration limits were also rejected. The SNB has released a statement saying that it was “pleased to hear the outcome”.”
“The rejection of the “Save our Swiss Gold”
proposal preserves the credibility of the EUR/CHF floor at 1.2000, which can still be defended by unlimited selling of Swiss francs by the SNB.”
“The Swiss franc strengthened modestly heading into the referendum, and may now reverse some of those recent gains, although more aggressive ECB monetary easing will remain a weight on EUR/CHF likely keeping it close to the floor.”
Key Quotes
“The prices of gold and other precious metals have been involved in the sell-off overnight as well. The price of gold has been negatively impacted by the announcement over the weekend that the Swiss public had rejected the “Save our Swiss Gold” proposal in a referendum which would have stipulated that the SNB hold at least 20% of its balance sheet in gold. The proposal was voted down overwhelming by 77% to 23%.”
“The two other initiatives on tax privileges for foreign millionaires and immigration limits were also rejected. The SNB has released a statement saying that it was “pleased to hear the outcome”.”
“The rejection of the “Save our Swiss Gold”
proposal preserves the credibility of the EUR/CHF floor at 1.2000, which can still be defended by unlimited selling of Swiss francs by the SNB.”
“The Swiss franc strengthened modestly heading into the referendum, and may now reverse some of those recent gains, although more aggressive ECB monetary easing will remain a weight on EUR/CHF likely keeping it close to the floor.”