Around 4:40 p.m., the Swiss currency was trading at 0.9886 francs for one euro following briefly strengthening to 0.9877 EUR/CHF.
“This level represents, apart from the day of chaos on January 15, 2015 (when the floor rate was abandoned), a historic low” for the currency pair, Thomas Heller, chief investment officer at Belvédère Asset Management, told AWP. .
For John Plassard, analyst at Mirabaud Banque, “the level has never been so low for the EUR/CHF since the creation of the single currency”, if we exclude the abandonment of the floor rate by the Swiss National Bank (SNB).
Euro weakness
The Swiss currency has been strengthened since the surprise hike on June 16 of the key rate by the SNB. The latter was raised by 50 basis points to -0.25%.
But the currency pair’s recent move is mostly down to Euro weakness. According to the Valiant bank, the current depreciation suffered by the European single currency comes from a fear of an energy crisis in Europe following the reduction of gas deliveries by Russia. The euro is all the more weakened by the reluctance of the European Central Bank (ECB) to fight once morest galloping inflation, unlike the American Federal Reserve (Fed) or the SNB.
According to Mr. Heller, the Swiss issuing institute authorizes a certain appreciation of the franc, beneficial to fight once morest imported inflation. But from a certain level, the SNB should intervene, estimated the expert. The latter thus sees a red line around 0.95 EUR/CHF.
