16 Jan 2015
SNB creates shockwaves - Rabobank
FXStreet (Guatemala) - Analysts at Rabobank noted that after more than 3 years, the SNB this week abruptly stopped trying to protect the EUR/CHF 1.20 floor.
Key Quotes:
"The SNB claimed that the overvaluation of the CHF has decreased in the past three years. In contrast, we would argue that protecting the EUR/CHF1.20 floor became too difficult in the face of renewed demand for the CHF as a safe haven asset in addition to the continued weakness of the EUR."
"The news, which was accompanied by a decision to push interest rates further into negative territory, came just one week ahead of an anticipated pledge by the ECB to launch quantitative easing which could further pressure the EUR."
"The SNB’s decision has had far reaching implications, one of which is to accelerate the broad-based downtrend in the EUR. As a consequence we have lowered our forecasts for many EUR crosses."
Key Quotes:
"The SNB claimed that the overvaluation of the CHF has decreased in the past three years. In contrast, we would argue that protecting the EUR/CHF1.20 floor became too difficult in the face of renewed demand for the CHF as a safe haven asset in addition to the continued weakness of the EUR."
"The news, which was accompanied by a decision to push interest rates further into negative territory, came just one week ahead of an anticipated pledge by the ECB to launch quantitative easing which could further pressure the EUR."
"The SNB’s decision has had far reaching implications, one of which is to accelerate the broad-based downtrend in the EUR. As a consequence we have lowered our forecasts for many EUR crosses."