Jordan CHF-in Front of “Enormous” pressure
The Swiss national Bank is likely to relax more this month. Speaking of this week, the SNB chief, Thomas Jordan, told the newspaper that the national Bank of strength under enormous pressure due to the safe-haven inflows, inflation, currency. The SNB spent most of last year to warn that a trade war-in the context of safe-haven inflows could undue head pressure on the ends of the foil, leading to the need for intervention. Now, with the COVID-19-pandemic markets, caught completely unprepared, and Jordan, told reporters this week that “unfortunately, We have no choice, but to the maintenance of negative interest rates,” said Jordan. Without it, we would be in a much more difficult situation now.
“The Swiss franc would be massively more attractive and in the financing conditions for the Swiss economy would be much worse,” The SNB chief, added: “The negative interest rate is necessary to prevent in time, great damage for Switzerland.”
At -0.75%, prices in Switzerland the lowest in the world, and although Jordan has said that he would prefer to raise interest rates, which from this level he explained that it is currently impossible.
SNB sight deposits Rise
The SNB has also increase the leg, to buy its foreign currency demand deposits (as a proxy for SNB intervention at the Central Bank rose from 77 billion euros. However, to disguise the SNB to continue its specific activity in the market, with Jordan to the journalist: “We have repeatedly stated, we are actively in the foreign exchange market to reduce pressure on the Swiss franc,”
In A move announced yesterday, the SNB increased the coverage of the CRF (COVID-19 and the refinancing of the facility, and the guarantees to the financing of local Swiss governments, not only of the Federal government, as in the past.
The program was for the first time.in February in order to funnel liquidity through local banks to companies by the COVID-19 is in a crisis, which has already passed the 15 billion USD worth of loans and be around 123k company
EURCHF Testing Support
The CHF is increasing steadily throughout the year, with EURCHF now at its lowest level since mid-July. For now, EURCHF continues to be defended along the 1.05 level to build though, with safe-haven flows continue, there is the risk of a fall under here. To make it easier to as lock-downs, in the beginning around the globe in the next six weeks will be crucial, and if it is, it will be seen, a second surge of infections, adhere to the debris on the risk appetite could once again send USD falls, and will certainly lead to further measures by the SNB.
Technical Point Of View
EUR / CHF (Bearish below 1.0629)
From a technical point of view. EURCHF continues to move in the lower within the bearish channel that has the technology we have today, framed, by 2018, the heights. Price has now broken below the key structural support at 1.0629 low (the yield of the s1). While below here, the 1.0334 level and the next downside marker. On the upper side, the 1.0850 highs (along with the bear-channel upper area, the most important hurdle that must be overcome to effect a shift in the mood.
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