SNB sells Franc to weaken since floor break against Euro

Euro has strengthened beyond 1.10 against Franc, strongest point since EUR/CHF floor was removed by Swiss National Bank.

On January 15^th, Swiss National Bank removed EUR/CHF floor in a surprise to the market, leading to as much as 40% strengthening of Franc, highest for any developed market currencies.

Franc (EUR/CHF) traded as high as 0.7 against Euro on the day, before stabilizing just above parity.

From the market movement it can be inferred that after all the noise settled down, Swiss National bank have been trying to maintain a de-facto floor around 1.02 and 1.03 area.

Since July, FX reserve data shows that Swiss National Bank has increased its intervention in the market to the highest level since the time was enacted back in 2011/12 at peak of the European debt crisis.

In last two months, Swiss FX reserve has swollen by $24 billion to $540 billion.

In light of SNB intervention, Franc is likely to weaken further against Euro and Dollar. Franc is currently trading at 1.102 against Euro (EUR/CHF) and 0.977 against Dollar (USD/CHF). Both are likely to rise another 300 and 600 pips respectively.