Trouble in Greece should spell franc gains but it's falling
The probability of Greece leaving the Eurozone has risen to 30% according to the latest poll from Reuters. Weekend negotiations were a disaster and risk aversion is the theme in Europe with the main equity indexes down around 2%.
Yet the Swiss franc is easily the laggard so far in the week. The US dollar is up 0.85% against the franc.
USDCHF hourly
One factor may have been a soft round of data in Switzerland. Producer & import prices were down 0.8% in May compared to a 0.1% rise expected. But that was hours before heavy selling hit the franc. The economy minister is on the wires, saying the government is aware of risks due to a strong franc but that came after the CHF move.
The other talk surrounds EUR/CHF demand. It's evident on the chart in the rally to 1.0515 after breaking above the European high of 1.0470. The mystery is why would anyone be buying euros and selling francs on news that a Eurozone country is on the verge of default?
It has to be some kind of flow-driven trade. Either the SNB getting involved, Greece selling francs or (more likely) some kind of corporate flow.
