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The impact of the SNB’s decision to remove the cap on the CHF proved to be a game-changed for markets. The SNB clearly expected an outsized reaction, judging from the comments from Governor Jordan in the wake of the decision. The accompanying rate cut of 50bp was, in part at least, designed to provide and offset, pushing interest rates further into negative territory. For now though, the negative carry on the Swissy has done little to temper the currency after the initial reaction. The extent of the CHF move lead to an out-sized ranged elsewhere, with more than a 2-big figure range on EURUSD proving to be 2.5 times the daily average range of the last month.

The extent of yesterday’s moves are going to push today’s data into the background. Final inflation data for the Eurozone is released at 10:00 GMT, with the move into negative territory on the flash estimate likely to be confirmed by the final release (at -0.2%). US inflation data is also released today, with the headline rate here seen falling to 0.7%, from 1.3%. In FX, we are set to see the CHF continue to look for a comfortable level, having already traded a 5 big figure range on EURCHF over the past twelve hours.

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