Removing the 'CHF peg' was the right decision! Is it?
These are the words from the SNB’s Jordan after they removed the 1.20 eur/chf peg, when Swiss franc causes panic on global markets. But, 15 days latter he is not that conviced in that decision. Talking on the SRF yesterday, head of the SNB Thomas Jordan said, that they are ‘observing’ the exchange rate situation, but he mentioned for several times that the Swiss franc remains overvalued at the current rate at 1.0500 vs euro. He is concerned about economy that’s for sure, he said, its possible we could have one or two quarters of negative quarterly growth. He also have said that, the bank is prepared to intervene in foreign exchange markets if necessary, but we do not speak about our transactions.
On my oppinion. If we take a look at the EUR/CHF development on the market, we could assume that they are already active. But, based on this talk, are they prepared again for new peg action? Is it possible to see a new firework on the market and is the 1.1000 EUR/CHF level the next possible target for SNB? Let’s see in the coming days!