BUZZ-COMMENT-SNB may be responsible for much recent FX movement
Oct 23 (Reuters) - Switzerland's central bank may be behind much recent currency movement.
Judged by sight deposits, the SNB was quiet all of September and half of October. Then it seems to have been jolted awake by a leap in risk aversion that drove the franc to its highest in more than nine weeks on Oct. 15 .
At that point, both EUR/CHF and EUR/USD rallied. That's important, because many traders who are long may have been misled into thinking the pair was rallying for reasons other than intervention.
EUR/USD rose 1.1689-1.1880 between Oct. 15 and Oct 21. It came back down after EUR/CHF reached 1.0748 (stabilized). If these moves are down to SNB, that's not so surprising. SNB rebalances, so it would sell EUR/USD strength, converting 36% of its intervention to dollars.
Other tell tale signs: EUR/JPY, EUR/GBP dropped from Oct 20. Yen is 8% of SNB reserve, GBP 6%. EUR/CAD lagged but is also now lower; CAD only makes up 3% of reserve.
For more click on FXBUZ
EURUSD vs EURCHFhttps://tmsnrt.rs/3jlfviQ
(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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