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. Investing

    EUR/CHF Finds Support at 1.05

  2. Forex News

    Euro Weighed by Risk Repricing Post-Greece, Almost QE-driven Again

  3. Investing

    EUR/CHF Trying to Break Out

  4. Forex News

    A Look at Greece’s Familiar-Looking Aid Proposal

  5. Investing

    Gold Gains But Remains Under Pressure

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!