Forex Flash: EUR/CHF uptrend should resume - Societe Generale
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EUR/CHF
FXstreet.com (Barcelona) - After the consolidation in EURCHF ahead of the weekend, Sebastien Galy, currency strategist at Societe Generale, thinks that "as real money steps in, the uptrend should gently continue."
Mr. Galy adds: "Swiss funds were underhedged in 2008 due to their mean variance based benchmark FX hedging. This led to considerable outflows and hence some far more sophisticated management of the CHF exposure. The question is wether they will recognize either a strategic opportunity to participate in a weakening CHF trend or a change in the FX regime. For the first, there seems some scepticism from bears while locals pay attention to the break even of the SNB on its fx interventions."
Mr. Galy adds: "Swiss funds were underhedged in 2008 due to their mean variance based benchmark FX hedging. This led to considerable outflows and hence some far more sophisticated management of the CHF exposure. The question is wether they will recognize either a strategic opportunity to participate in a weakening CHF trend or a change in the FX regime. For the first, there seems some scepticism from bears while locals pay attention to the break even of the SNB on its fx interventions."
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