SNB - Swiss National Bank

The Swiss National Bank Interim Chairman Thomas Jordan have had a hard time explaining the SNB’s commitment to upholding the 1.20 cap put there by his predecessor Phillip Hildebrand. On his April 10 Zurich press briefing, Jordan said that the fears about the SNB resolve is misplaced and that it was prepared to make unlimited foreign purchases to ensure that the cap is upheld. 

Some financial analysts have indicated that the SNB may push its ante from the current 1.2000 to 1.2500. According to the source of these news reports, traders should not underestimate the SNB commitment to keep the euro-Swiss cross above the 1.2000. At 1.2000, the cross is highly undervalued according to some bank officials in the country. 

The Swiss National Bank had come under pressure to defend its 1.20 francs per euro limit and breaches of the cap about the SNB intentions. Today the SNB Interim Chief Thomas Jordan indicated that the bank will continue to enforce the cap despite the recent trends in the euro. 

The euro region debt crisis has spilled over to Swiss, with the Swiss Franc breaching the Swill National Bank’s ceiling of 1.20. The Swiss Franc exceeded the cap put by SNB on September 6 for the second day yesterday prompting the SNB interim Chairman Thomas Jordan to answer questions from investors on credibility issues of the currency policy. The investors are seeking to know just how much SNB is willing to do to ensure that the policy works.

The Swiss National Bank held its interest rate at zero as it had been forecasted by many analysts. The SNB governor indicated that they took this decision as they try to keep the Franc from strengthening further against the euro. 

Last week, major central banks gave their semiannual reports on foreign exchange turnover. It revealed that though trading improved in the United States, it dipped severely elsewhere. The Chart shows some vital data released. 

The President of the Swiss National Bank (SNB, central bank), Philipp Hildebrand, resigned on Monday (9) . His resignation occurs after an alleged scandal and abuse of insider transactions from his wife deals.
Hildebrand had support of the Federal Council (Swiss Government) and the direction of the SNB, who had accepted his public apology and consider the investigations on the right track.

The SNB’s Hildebrand faces ongoing embarrassment due to trades his wife made on the Swiss franc that began just before EURCHF floor was declared last year.

A lot of water has flowed under the bridge since we first made our unrequited call for a rise in the EUR/CHF ‘floor’, and our fears for a deepening pool of deflationary pressure in Switzerland appear to have been borne out. As we have argued, the introduction of the floor as a means to avert deflation was in itself a risky strategy given that it provided the perfect opportunity for investors to offload more of their Euro-zone exposure; but having declined to ‘double down’, the SNB has simply taken on risks without maximising its prospects of reward.