SNB supports EUR-CHF exchange rate

The initial reaction of the FX market to the news surrounding Greece wore off quickly in the other currencies as well, with the exception of EUR-CHF. Even though the exchange rate was initially able to gain some ground again having eased by more than 1%, the trend reversed intraday and the pair eased again. 

After all SNB President Thomas Jordan admitted in the morning that due to the events over the weekend the SNB had actively supported the EUR-CHF exchange rate. And even before that the SNB is likely to have intervened on the market repeatedly. As soon as the interventions become increasingly obvious in the SNB's balance sheet the Swiss central bank is likely to struggle, as concerns about an extension of the balance sheet as a result of increasingly high interventions were what caused it to abandon the minimum exchange rate at the beginning of the year, states Commerzbank. 

Admittedly the rise is now likely to be much slower, but the question arises once again how long the SNB intends to support EUR-CHF. In view of the situation in the euro zone it seems unlikely that EUR will appreciate any time soon, adds Commerzbank.