Currency intervention in crisis that’s as sharp as a Swiss knife
Friday, June 5, 2020 18:59
By TIM JANOT |
People queue to change their Swiss francs at a currency exchange office in Geneva.
In this case, in the markets, we are referring to the Swiss National Bank (SNB), which is as sharp as a tack for its spot-on currency intervention moves.
Our view at Mansa-X is that the Swiss franc’s strength could gather momentum on a renewed rise in risk aversion brought about by Covid-19 slowing economic progression further despite the central bank’s efforts to contain the currency’s appreciation.
The Swiss National Bank’s practice of currency interventions has created a predicament for the central bank itself.
Also what has been witnessed in the market these last two months is that speculative investors have reduced bets for a stronger Swiss franc as it is becoming clear the central bank is willing to curb the currency’s appreciation.
