We’re more or less back where we started in the swissy and gold after that little poll excitement. Not quite the retirement move we were all looking for but it got the pulse racing nevertheless.
HSBC’s David Bloom says that the SNB floor will be kept even if the referendum goes against the SNB
“If the ‘Save our Swiss gold’ referendum is passed on the 30th of November, the SNB has said it would be
‘unnecessary and unhelpful’ and would have a ‘direct impact on the SNB’s capacity to act,'” he says. Because of this, the market sees the EUR-CHF floor as being more vulnerable, and because of this, the cross has drifted lower. “We believe the gold initiative will not prevent the SNB from conducting unlimited intervention in FX to protect the floor,”
He sees no technical reason why the SNB would not be able to defend the 1.20 level and that any repercussions may be felt more in gold than CHF
It’s a fair point he’s made and one I agree with. The SNB have partly put themselves in the firing line with their comments on a yes vote making life difficult but they’ve obviously got to highlight the pitfalls of the referendum going against them.
Aside from what happened in EUR/CHF we’ve also been given a clue about what might happen in gold.
