USDCHF: Strategy Views from Credit Agricole
The CHF has underperformed other FX majors this month, as the extended
rebound in DM rates has taken its toll on the low-yielder. This reversal should be
welcomed by the SNB which shifted away from its inclination for FX sales in its
rhetoric at its December meeting, while the CHF had gone into 2024 on its
strongest footing since 2015 on a real trade-weighted basis. The first rebound in
months in the December FX reserves data suggested that the SNB had been good
to its word, while it remains to be seen whether the same happened in January.
On the one hand, FX changes (the CHF fell by more than -2% against the USD
and -0.3% against the EUR) had a positive MtM impact and the global equity rally
had longer legs. On the other hand, DM yields showed rather mixed developments,
with a rebound in the long end. Ultimately, today’s release is unlikely to offer any
great insight on eventual interventions from the SNB, as if anything the CHF may
appear somewhat too strong for its liking.
rebound in DM rates has taken its toll on the low-yielder. This reversal should be
welcomed by the SNB which shifted away from its inclination for FX sales in its
rhetoric at its December meeting, while the CHF had gone into 2024 on its
strongest footing since 2015 on a real trade-weighted basis. The first rebound in
months in the December FX reserves data suggested that the SNB had been good
to its word, while it remains to be seen whether the same happened in January.
On the one hand, FX changes (the CHF fell by more than -2% against the USD
and -0.3% against the EUR) had a positive MtM impact and the global equity rally
had longer legs. On the other hand, DM yields showed rather mixed developments,
with a rebound in the long end. Ultimately, today’s release is unlikely to offer any
great insight on eventual interventions from the SNB, as if anything the CHF may
appear somewhat too strong for its liking.
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