Swiss central bank aggressively pushes franc down
Submitted by cpowell on Fri, 2010-02-05 07:58. Section: Daily DispatchesSwiss Franc Sinks; Central Bank Spotted Selling
By Takashi Mochizuki
MarketWatch.com
Friday, February 5, 2010
http://www.marketwatch.com/story/world-forex-swiss-franc-sinks-central-b...
TOKYO -- The Swiss franc fell to multi-month lows against the euro and dollar in Asia Friday as market participants said Switzerland's central bank made a rare and aggressive intervention to curb its currency.
The euro spiked around 0300 GMT to CHF1.4905, its highest since Dec. 28, from CHF1.4635. The dollar jumped to CHF1.0800, its highest since Aug. 18, from CHF1.0670.
Two dealers in the region said they saw franc-selling orders under the name of the Swiss National Bank on the EBS trading platform. The central bank was bidding for euros at CHF1.49, far above the spot rate of CHF1.46, they said.
"I've been in the currency market for two decades, but this is my first time to see the SNB doing intervention in Asian time," said one dealer.
The central bank has been talking down the franc, especially since Philipp Hildebrand became SNB president last month. It intervened several times last year, typically in the euro/franc cross.
Dealers in Asia said there was about $1 billion of franc-selling orders by short-term hedge funds, an unusually big amount, especially for a currency cross that seldom trades actively in Asian hours.
Euro/franc is "all over the shop--rumors of official buying interest," said a dealer in Singapore. "It jumped two big figures in a nanosecond."
At 0530 GMT, franc was off its lows, with the dollar at CHF1.0752 and the euro at CHF1.4735.
The dollar and euro were stronger against the yen as investors squared yen-long positions after steep gains overnight by the Japanese currency when investors fled risky assets amid stock falls and sovereign-credit worries. At 0530 GMT, the dollar was at Y89.65, down from Y88.94 Thursday in late New York, and the euro was at Y122.90 from Y122.20.
But dealers said the bias remains yen-positive as risk appetite is still low due to lingering concerns European public finances.
"The European Commission Wednesday approved Greece's plan to reform its fiscal health, but the plan is unrealistic," said Yuji Saito, head of foreign exchange trade at Calyon in Tokyo. "Along with Portugal, Italy and Spain, they could get a cut in ratings any time."
Indeed, the euro briefly fell below $1.3700 for the first time since May 20, showing investors' increasing concerns about the euro-zone periphery.
Investors will be closely watching for U.S. nonfarm payrolls data for January due at 1330 GMT. If the report misses economists' forecasts as it did last month, the yen would benefit most, dealers said. Economists in a Dow Jones Newswires poll expect payrolls to be unchanged in January from December.
The Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 80.144 from 79.907.
* * *
Join GATA here:
Phoenix Resource Investment Conference
Thursday and Friday, February 4 and 5, 2010
Renaissance Glendale Hotel and Spa
Glendale, Arizona
http://www.cambridgeconferences.com/index.php/phoenix-resource-investmen...
* * *
Support GATA by purchasing a colorful GATA T-shirt:
Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:
http://www.cartserver.com/sc/cart.cgi
Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon:
Nessun commento:
Posta un commento