Comments on: EUR/CHF: Best left alone until after the Gold referendum

By: Peter

Peter — Fri, 21 Nov 2014 04:07:46 +0000

Sean, exact same stuff SNB has been saying the last three years. They may not make explosive iintervention but should be able to sit on the 12010 bid for a long while IMO

By: Sean Lee

Sean Lee — Fri, 21 Nov 2014 02:01:46 +0000

They generally just rebalance their reserves in the spot mkt James, pretty vanilla stuff

By: James

James — Thu, 20 Nov 2014 22:14:50 +0000

Isn’t the SNB left with plenty of EUR (and USD?) after their intervention and these balances are used to purchase debt instruments in those currencies?

By: Sean Lee

Sean Lee — Thu, 20 Nov 2014 21:03:16 +0000

This is different in that they are trying to defend 1 exact market level and the only way to do this is in the spot market. As they are selling their ccy, as opposed to buying like the BOE tried to do in 1991, they can theoretically print as much as they like to sell into the market. They are also using l/t macro policies to keep the CHF from strengthening but physical intervention is the only way to defend one particular level

By: cozmin

cozmin — Thu, 20 Nov 2014 20:54:03 +0000

Hi Sean, what i really dont understand is why Snb preders this kind of intervention instead of bond buying like other central banks? Appreciate your answer.
best to u. Thanks