Safe haven flows have seen the swiss franc in big demand 9 Aug
Whilst the safe-haven of choice lately has been the yen a certain amount of common sense has now prevailed, geographically at least, and it's the swiss franc that's stealing a few headlines on escalating NK tensions.
USDCHF down to 0.9657 from 0.9760 and EURCHF down to 1.1330 from 1.1455 and a quick look at CHFJPY, up from 113.00 to 113.76, shows it's currently the winning the race for safe-haven flows.
So where does that leave the SNB? On-going intervention/smoothing has helped underpin EURCHF in the past 12 months even if USDCHF has seen a few ups n downs, moves that we've seen reflected in H1 SNB earnings.
Recent CHF weakening however has come from more natural flow sources as hedge funds have taken the view of ECB tightening on the cards and SNB keeping rates in negative territory.
So the SNB will have welcomed that and as I've posted probably given the moves a helping hand along the way.
Their concern over renewed safe-haven CHF demand though will have their fingers very near the "push to weaken franc" button. Rhetoric alone won't do the job so I reckon that if these risk-off flows continue we can expect Jordan & Co to step up their activity again.
Dangerous game though as they won't be able to stem the global flows should they accelerate, merely limit the damage.
Currently 0.9683 and 1.1370 on session highs, caution is advised at least if you're thinking of buying a few francs at these levels. I prefer to buy EURCHF dips still but currently square after the failures above 1.1500 and understandably waiting to see what happens for the moment.
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