EUR/CHF Likely to Remain Steady after SNB Statement
Having opened the week around the 1.2100 level, the EUR/CHF pair dipped on Wednesday to 1.2084 before recovering to 1.2109 on Thursday. However, on Thursday morning there was a sudden drop down to 1.2069.
The drop came after the Swiss National Bank maintained its cap of 1.20 per Euro and said that it was prepared to defend the level. The Swiss Franc was given some extra strength when it became apparent that the SNG was not going to take any new measures to slow down the appreciation of the Franc.
In its statement the SNG said that it will keep this minimum exchange rate at all costs even if it means purchasing unlimited amounts of foreign currency. As a result this pair is unlikely to undergo any drastic changes in the near future; rather it will probably hover just above the 1.20 level.