EUR/CHF hits two-week highs near 1.0580; deposits at SNB on the rise
|- Sight deposits rise in Swiss National Bank suggesting central bank has been active.
- Swiss franc drops across the board on Monday.
The EUR/CHF rose on Monday from near 1.0500 and peaked at 1.0578, the highest level since April 9. As of writing, it trades at 1.0565, up 40 for the day, the biggest day in a month.
A slide of the Swiss franc across the board boosted EUR/CHF. The move was also supported by an improvement in market sentiment and takes place ahead of Thursday’s European Central Bank meeting.
Data released on Monday showed commercial banks deposits at the Swiss National Bank (SNB) rose by CHF 13.4 billion last week; the most significant increase since January 2015 when the central bank abandoned the 1.20 floor in EUR/CHF.
Higher deposits at the SNB suggest intervention to curb franc’s strength. Analysts see the SNB defending the 1.0500 area. Regarding monetary policy, at the moment, market participants do not expect more rate cuts from the SNB (currently at -0.75%).
A slide below 1.0500 could lead to an acceleration to the downside in EUR/CHF. It would be trading at the lowest since mid-2015. On the upside, resistance emerges at 1.0508 and 1.0605.
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