Wednesday, 1 February 2012

As the JPY simmers, the next CB play is the CHF

Given that the SNB has repeatedly, and catagorically, stated that it will continue to defend the 1.2000 level on EURCHF our next "Central Bank alert" (and matching trade) looks set to be triggered.


As this is a pure play on intervention, it would be wise to wait for the pair to edge closer to ground-zero - fundamentals of safe-haven and interest rate policy virtually guarantee this. However, with such strong verbal commitment from the SNB, we may have to wait a considerable while.

We remain an observer only at this stage.
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