Forex Flash: EUR/CHF should overshoot into the 1.30-1.35 region – Societe Generale

By FXstreet.com | January 16, 2013 AAA

FXstreet.com (Barcelona) - In a metaphoric way, Sebastien Galy, FX strategist at Societe Generale, says that book options as burning as EURCHF "explodes higher." "The great portfolio outflows are yet to materialize boosting EURCHF," the analyst adds, suggesting: "We target an overshoot above 1.30 as investors put on strategic shorts in CHF."



"The Swiss Franc should overshoot into the 1.30-1.35 region as investors start using the CHF as a funding currency and safe haven flows are squeeze out. Banks for example hold over 100bn in CHF deposits. For now, the move higher in EURCHF is driven by the risk management of existing option structures and a repositioning of hedge funds. The Swiss Franc remains very expensive across multiple metrics and lags the reality of a far more stable Europe," he concludes.



You May Also Like

COMPANIES IN THIS ARTICLE
Related Forex Analysis
  1. Forex News

    ECB Press Conference Invites Minimal Volatility, Limited EUR/USD Range

  2. Forex News

    Any Euro Rally on ECB Economic Optimism to Prove Short-Lived

  3. Forex News

    EUR/USD Volatility Starting to Run Higher as Data, Greek Headlines Collide

  4. Forex News

    What Could Greece Troubles Mean for the Euro? Substantial Volatility.

  5. Investing

    EUR/CHF Moving Slow on Monday

Trading Center