Forex Flash: Rallies in EUR/CHF would face in the next weeks – UBS
Forex pairs in this Article »
EUR/CHF
FXstreet.com (Barcelona) - The late risk-off tone and its subsequent inflows to the CHF safe haven has dragged the pair from last week's tops above 1.2570 to today's test of the 1.2400 figure, ahead of the Eurogroup meeting starting today.
M.Mohi-uddin, Director of FX Strategies at UBS, assesses "The message to draw here is that the Swiss franc is likely to be a significantly more volatile currency this year compared to 2012&First, the Swiss National Bank will not stand in the way of a move higher in the cross. Indeed a weaker currency will provide support to the economy& Second, over the last six months UBS clients have bought around US$30bn worth of Swiss francs. Only now is that flow starting to reverse. Third, the franc in contrast to sterling or the Australian dollar remains a true safe-haven. That suggests EURCHF rallies over the next few weeks will reverse again ahead of America's next fiscal cliff on March 1, keeping the currency volatile".
M.Mohi-uddin, Director of FX Strategies at UBS, assesses "The message to draw here is that the Swiss franc is likely to be a significantly more volatile currency this year compared to 2012&First, the Swiss National Bank will not stand in the way of a move higher in the cross. Indeed a weaker currency will provide support to the economy& Second, over the last six months UBS clients have bought around US$30bn worth of Swiss francs. Only now is that flow starting to reverse. Third, the franc in contrast to sterling or the Australian dollar remains a true safe-haven. That suggests EURCHF rallies over the next few weeks will reverse again ahead of America's next fiscal cliff on March 1, keeping the currency volatile".
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