For argument’s sake, let’s say the SNB or the Swiss government pulls some sort of rabbit out of its magic hat. Do you think EUR/CHF is going to rally 20 handles like it did back in September?
Not a chance. Back then, the market was long CHF to a degree never before known to man as safe-havens were few and far between as the market looked for shelter from the European storm. All that is gone now. The market is essentially flat the franc, based on recent CFTC data. You just don’t have the ammunition to prompt a massive move the way you did months ago.
Would EUR/CHF go up if the SNB imposed negative rates? Yes, it probably would. Just don’t expect to win the lotto like back in September.
