Swiss move sparks euro selling

The key theme in fx markets was a significant appreciation of the Swiss franc against all currencies, after the Swiss National Bank surprised markets by unpegging EUR/CHF.

Euro
Source: Bloomberg

Overall, the euro suffered heavily across the board from the move. While EUR/USD is the one most watched, there was an even bigger move in
EUR/JPY with the pair dropping to three-month lows. Euro weakness was triggered by expectations the SNB is doing this in anticipation of ECB quantitative easing. Meanwhile, safe haven plays including the yen benefited as some investors panicked on the SNB move as risk was in a spin. EUR/JPY fell from around ¥138.80 all the way down to ¥135.00 where it is currently trading. This sees the pair test October 2014 lows and a break of this could see the pair trade at two-year lows in the near term. A close below the ¥135.00 level could trigger further weakness as some traders look to sell the pair on downside momentum. This trade seems to have legs given the key events coming up particularly for the euro are likely to spark further weakness.

 

 

 

Click to enlarge

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.