EURCHF has moved above 1.12.
Why should you give a shit? Well, it’s notable because this is the first time that’s happened since the SNB removed the floor.
This comes three days after SNB President Thomas Jordan told Le Temps that he “still considers the franc significantly overvalued, according to models and indicators.”
“For this reason we maintain our monetary policy of negative interest rates and interventions if needed,” he added.
Needless to say, that means it’s attractive as a funding currency.
“The broad risk-on sentiment that we’re seeing is probably weighing on the Swiss franc,” Erik Nelson, a currency strategist at Wells Fargo noted on Wednesday. “When things are good, people like to sell the negative-interest-funding currency and buy high- yielding currencies.”
Well, things are going pretty damn “good”, wouldn’t you say?