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Swiss Franc Tumbles On Intervention Fears

Published 05/21/2019, 12:36 PM
Updated 07/09/2023, 06:31 AM

The Swiss Franc has been nursing losses since late New York session on Monday as traders took SNB's intervention threats close to heart.

The bearish momentum was prompted by intervention fears as the Swiss National Bank stands ready to step in if it deeds necessary to ensure the market stability, according to the recent comments of Thomas Moser, the alternate member of the Governing Board in the SNB.

Speaking at a conference in Copenhagen on Monday, he made it clear that investors should not ignore intervention risks as the central bank would not hesitate to resort to this option if it felt that it was a necessary step. In recent four years, the SNB has used a negative deposit rate and intervention fears to discourage franc's buying.

The Swiss currency has lost nearly 0.3% of its value against USD and touched $1.0119 during early Asian hours before retreating to $1.0111 by the time of writing. Against Euro, CHF retreated towards $1.1274. USD/CHF has lost over 0.4% in recent 30 days, though it is still 2.8% higher than at the beginning of the year.

The policy-maker had to resort to intervention threats to stop CHF growth amid a flight to safety inspired by increased trade tensions between the US and China. Being regarded as a haven currency, the Swiss franc tends to grow when the market is jittery and risk-aversive.

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