Swiss franc may slide as SNB’s U turn on economic projections

The Swiss National Bank yesterday made only minor modifications to its projections to expect the Swiss economic growth just under 1% this year. We look at this trivial alteration may have impact on Franc trading against Euro but not dollar with more than 40% of Swiss exports going to the euro zone, firms across Switzerland warned of a plunge in profits, with the luxury and tourism industries most exposed. On trade terms USDCHF is quite stagnant or little bullish.

As a result financial markets were stunned by the SNB scrapping a three-year-old cap on the franc, sending the currency soaring against the euro and stocks plunging on fears for the export-reliant Swiss economy.

CPI forecasts were up by 0.1% point for 2015 and 2016 to -1.0% and -0.4% respectively.

SNB president Jordan reiterated that the central bank is prepared to intervene in FX markets and is prepared to adapt to a market shock from Greece.