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SNB Preview: Don’t expect a rate cut - SocGen

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 10, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Delhi) – Kit Juckes, Research Analyst at Societe Generale, suggests that they don’t expect the SNB to cut rates further this week, because they don’t have to.

    Key Quotes

    “With EUR/USD above 1.10 there is no pressure to the downside in EUR/CHF. In January the market was (very) short CHF and building a short EUR position that wasn’t yet very big. That was a recipe for pressure on the floor to build and at the same time, for a huge move once the floor was broken.”

    “Now, the market is more balanced, and Euro shorts are being reduced, not built. A rate cut may still be necessary in due course, because the inability of the Swiss financial system to re-cycle excess savings post-GFC hasn’t been resolved, but judging by how unpopular it would be with pension providers, let alone Joe Public, there’s a good chance they do nothing, and that EUR/CHF holds comfortably above 1.0750 and within the recent range.”
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