ANZ is suggesting a trading strategy on the EUR/CHF currency pair based on the latest policy stance of the Swiss National Bank (SNB).
Key Points:
SNB’s New Approach: ANZ highlights that the Swiss National Bank (SNB) revealed in its June meeting that it is adopting a “sell foreign currency” approach as part of its foreign exchange intervention toolkit. This is aimed at keeping inflation low in Switzerland.
Implications for EUR/CHF: The bank implies that SNB will be closely monitoring the EUR/CHF pair, with a focus on keeping the pair weaker. A weaker EUR/CHF is considered key in controlling inflation that could be imported from Eurozone economies.
Trading Strategy: ANZ suggests that traders should look for opportunities to sell EUR/CHF when it approaches parity (1.00). Specifically, they recommend taking short positions if the currency pair spikes towards 0.99.
Summary:
ANZ recommends a trading strategy on the EUR/CHF currency pair in light of the Swiss National Bank’s policy to sell foreign currency as a measure to control inflation. ANZ suggests that traders should consider selling EUR/CHF on any spike towards 0.99, as the SNB is likely to be monitoring the pair for signs of strength and may take action to keep EUR/CHF weaker to manage imported inflation from the Eurozone.
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