EURCHF : SNB will take more steps if needed !
Monday, November 7, 2011
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The Swiss National Bank will take further steps following its imposition of a cap on the franc if it believes they are warranted, the central bank's vice chairman said on Monday.
After the safe-haven franc nearly touched parity with the euro, the SNB capped the currency at 1.20 francs per euro in September and pledged to defend that level with all means necessary.
"If the franc suffers an appreciation that's no longer tolerable, then we take steps to push deflationary risks out of the way. And we did that," Vice Chairman Thomas Jordan told a conference in the city of Lucerne.
"We're always looking at the situation," he said. "If there's need for action...then we're prepared to take further steps."
Jordan's comments reiterate the line taken by SNB Chairman Philipp Hildebrand in a newspaper interview at the weekend. He said the central bank could take further measures if deflation threatened.
Hildebrand's remarks at the weekend renewed speculation the SNB might move the cap on the franc to weaken it further.
In contrast to the SNB's 2009-2010 intervention spree, the cap on the franc has been welcomed by politicians and industry, which has helped the SNB maintain the ceiling without huge interventions.
"Political support is essential to maintaining the credibility of this minimum exchange rate," Swiss Finance Minister Eveline Widmer-Schlumpf said, adding it was up to the central bank alone to decide whether to take further measures.
"The national bank is independent. It will also take the necessary steps, if they are needed," she said.
Yet with signs mounting that economic momentum is slowing, calls have increased for the SNB to shift the cap.
Among those advocating a still weaker franc was Gerold Buehrer, head of the business lobby group economiesuisse, who said it would be a "Christmas gift" for Swiss industry if the SNB lifted the cap to 1.30.
A similar view was also taken by the economic commission of the lower house of parliament, which called on the SNB to move the cap to 1.30 francs per euro "as soon as possible," the Swiss SDA news agency reported.
SDA reported the majority of the commission said the decision was up to the SNB, although a minority wanted the government to intervene with the central bank, whose independence is protected by the constitution
Finally here what I suggested on this pair 2 weeks ago:
After the safe-haven franc nearly touched parity with the euro, the SNB capped the currency at 1.20 francs per euro in September and pledged to defend that level with all means necessary.
"If the franc suffers an appreciation that's no longer tolerable, then we take steps to push deflationary risks out of the way. And we did that," Vice Chairman Thomas Jordan told a conference in the city of Lucerne.
"We're always looking at the situation," he said. "If there's need for action...then we're prepared to take further steps."
Jordan's comments reiterate the line taken by SNB Chairman Philipp Hildebrand in a newspaper interview at the weekend. He said the central bank could take further measures if deflation threatened.
Hildebrand's remarks at the weekend renewed speculation the SNB might move the cap on the franc to weaken it further.
In contrast to the SNB's 2009-2010 intervention spree, the cap on the franc has been welcomed by politicians and industry, which has helped the SNB maintain the ceiling without huge interventions.
"Political support is essential to maintaining the credibility of this minimum exchange rate," Swiss Finance Minister Eveline Widmer-Schlumpf said, adding it was up to the central bank alone to decide whether to take further measures.
"The national bank is independent. It will also take the necessary steps, if they are needed," she said.
Yet with signs mounting that economic momentum is slowing, calls have increased for the SNB to shift the cap.
Among those advocating a still weaker franc was Gerold Buehrer, head of the business lobby group economiesuisse, who said it would be a "Christmas gift" for Swiss industry if the SNB lifted the cap to 1.30.
A similar view was also taken by the economic commission of the lower house of parliament, which called on the SNB to move the cap to 1.30 francs per euro "as soon as possible," the Swiss SDA news agency reported.
SDA reported the majority of the commission said the decision was up to the SNB, although a minority wanted the government to intervene with the central bank, whose independence is protected by the constitution
Finally here what I suggested on this pair 2 weeks ago:
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