Extraordinary Vietnam fraud case exposes the inherent vulnerabilities of banks 
History for sale: what does South Africa’s struggle heritage mean after 30 years of democracy? 
Half our colleagues suffer pain and discomfort from periods. But they’re still a taboo subject at work 
Fallout: an expertly crafted TV adaptation that manages to incorporate some of the best elements of gameplay 
How breakdancing became the latest Olympic sport 
UK smoking ban would have many benefits for public health – but only if it’s effectively implemented 
What is ‘techno-optimism’? 
Family farms are fast disappearing: our research shows how young generations can take them up successfully 
From the coast to the deep sea, changing oxygen levels affect marine life in different ways 
AI-powered ‘deep medicine’ could transform healthcare in the NHS and reconnect staff with their patients 
What’s the difference between ADD and ADHD? 
How Anzac deaths changed the way we mourn to this day 
Euro is on its way to close third consecutive weeks of positive gains against Franc, while Dollar is on its for fourth consecutive weeks and with special thanks to Swiss National Bank (SNB).
Price actions was somewhat foretelling this and today SNB declaration of FX reserve confirmed the move.
SNB is back at selling Franc with new vigor. The chart attached shows that FX reserve at SNB rose by 15.8 billion in July from June, highest pace since December, 2014. This change is fourth largest since 2012, at peak of Euro zone crisis.
Brief history:
- SNB had introduced a Peg of Euro and Franc at 1.2 in September, 2011 to avert heavy appreciation of Franc over Euro zone crisis.
- In summer of 2012, SNB had to use 171 billion in intervention, just over three months to defend the peg at peak of Euro zone crisis.
- Since then, SNB just had to use about 54 billion to defend the peg till December 2014.
- In December 2014, SNB had to use about 32.7 billion to defend the peg, as Euro dropped over speculation of quantitative easing from European Central Bank (ECB).
- July's selling has been the highest since then and fifth largest in at least three years.
There are possibilities of success for SNB in pushing Franc down, even against Euro.
Why?
- Euro zone crisis is long past and Europe is now moving towards growth.
- Initial knee jerk reaction to ECB's QE is majorly done with.
August moves are indicating that SNB is still large in the market, with Franc being the worst performing major this week.
Dollar might gain further against Franc if SNB maintains vigor.
Euro is currently trading at 1.076 against Franc, highest level since Fedruary. Further rise is possible, however 1.085-1.09 area is likely to pose as challenging resistance in the near term.
