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CHF Spot Rally Puts Prices North of Market's End-24 Estimate

CHF
  • Despite more muted markets elsewhere, CHF is grinding higher to become comfortably the firmest performer in G10. Alongside the run higher in spot, front-end implied vols are well supported, putting the one-month tenor north of the mid-October highs of 6.3 vol points.
  • Pressure on EUR/CHF spot puts the cross at (again) the lowest levels since the removal of the SNB peg in early 2015, but on course for the lowest close since the inception of the EUR.
  • Should USD/CHF slip through 0.8333 (yesterday's low) the pair is again on track for the lowest close since 2011. Today's rally is the resumption of strength, rather than a fresh rally, and comes despite the SNB moderating their language toward the currency in December (removing the phrasing "the focus is on selling foreign currency").
  • Reasoning behind the CHF strength has largely been pinned on positioning for 2024, and potential global monpol pivots that could follow next year. BBG Consensus for USD/CHF sees USD/CHF at 0.8800 for end-24, but submissions range from 0.8100 to as high as 0.98.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
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MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
Homepagemarkets-real-timeBulletMarketsFixed Income BulletsForeign Exchange Bullets

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