Swiss franc bolts higher as the SNB, BoE join the rate hike party while BoJ dances alone
The Swiss franc found support post SNB bombshell 0.50% hike; equities remain under pressure as risks swirl from central bank actions and with the SNB joining the Fed and BoE this week, will EUR/CHF go lower?
The Swiss franc is higher as the fallout from the Swiss National Bank’s (SNB) unexpected 50 basis point (bp) rate hike continues. The Bank of England (BoE) 25 bp hike has also seen Sterling rally as the US dollar slips.
USD/CHF has put in a double top after hitting the mid-May high of 1.0050 on Wednesday. It has since collapsed below 0.9700 after the SNB’s announcement yesterday.
The SNB has a storied history of unconventional changes to policy. Most famous is the abandoning of capping the rising Franc in 2015 that saw EUR/CHF go from 1.2000 to 0.8600 at a blistering pace. It then recovered back above parity, where it has mostly been ever since.
The BoE was more straight up, delivering on the telegraphed 25 bp rate rise. GBP/USD is only slightly softer through the Asian session.
While the US dollar is generally under pressure elsewhere, USD/JPY galloped north after the Bank of Japan left monetary policy unchanged. Next Thursday’s inflation data there will be closely watched.
A deeply negative Wall Street cash session has seen futures recover somewhat after hours. Australian and Japanese equities had a down day, but Hong Kong and mainland Chinese markets gained some ground.
Industrial metals are weaker while gold is fairly steady near US$ 1,842 an ounce. Crude oil is a tad weaker with the WTI futures contract below US$ 117 bbl and the Brent contract near US$ 119 bbl.
Looking ahead, after Eurozone CPI, Canada and the US will see industrial production figures.
EUR/CHF technical analysis
In the wake of the SNB’s rate hike, EUR/CHF collapsed below an ascending trend line to fall back inside a broad 4-month range of 0.9973 – 1.0515.
The move down bounced off a break point at 1.0132 and closed above a previous low of 1.0189 and these levels might provide support.
A double top was put in place last week when the price was unable to break above last month’s peak of 1.0515.
On the topside, resistance could be the simple moving average (SMA) or the previous highs of 1.0478 and 1.0515.
This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. This information Advice given in this article is general in nature and is not intended to influence any person’s decisions about investing or financial products.
The material on this page does not contain a record of IG’s trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.
