EUR/CHF continues to follow EUR/USD lower, and is now trading at 1.2083, just 83 pips above the floor of 1.20 that the Swiss National Bank placed under the pair in September 2011.
Towards the third anniversary of the peg, should the SNB begin worrying?
Euro/Swiss is at the lowest levels since early 2013. At the peak, the cross temporary breached 1.25.
Here is how the weekly chart looks like:
At the time, the SNB announced it is willing to buy “unlimitedâ€Â amounts of foreign currency to defend the exchange rate in order to prevent deflation and to help exporters.
As inflation in Switzerland remains subdued, the chances of the SNB lifting the peg seem remote.
In previous times when the euro was suffering, there was a lot of pressure on the SNB. However, after the initial phase, the cross took some distance from the 1.20 floor and traders developed confidence in that level.
Will some investors try to break the SNB?
