Parity Party for the Swissy
Posted on November 25, 2009 by Yohay
Filed Under Forex News, Forex Opinions | 4 Comments
The Swiss Franc has reached parity with the US dollar. Apart from the general weakness of the greenback across the board, also the Swiss National Bank has a role in bringing USD/CHF to 1.
USD/CHF reached a year-to-date low of 0.9960 and trades now at a perfect 1.0000. The pair last reached this rate in April 2008. The Swissy enjoys general dollar weakness – this sent EUR/USD to 1.5140.
Apart from the dollar weakness, USD/CHF has now been released by the Swiss National Bank: the SNB keeps its eye on the EUR/CHF, and clearly marked the a rate of 1.50 as a support line. I already wrote that this resistance line is a courtesy of the bank.
But regarding the US dollar, the SNB cares less. Switzerland is surrounded by members of the European Union – all of them belonging to the Euro-zone. What about the greenback? They gave up on it, as the Russians began making transactions in Canadian dollars today.
All of their interventions against the dollar failed to work.
Another move by the SNB came from its chairman: Jean-Pierre Roth – he said that central banks may soon start withdrawing stimulus as global recovery is seen. These positive words help the Swissy gain against the greenback, as the “safe haven” dollar is not needed anymore.
What’s next for USD/CHF? The all time low is at 0.9635, which was a swing bottom reached in March 2008. But that looks too far now…
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