As February’s trading figures across global markets continue to emerge, it is becoming increasingly clear to see that the Swiss National Bank’s decision to remove the 1.20 peg on the EURCHF pair was part of an effort to shore up Switzerland’s position as an economic powerhouse against a crumbling Eurozone economy.
Today it has been reported that Switzerland’s FX reserves reached a new all-time high in February, the first whole month since the Swiss National Bank’s decision which took place on January 15 this year.
Reuters today reported that the 11-billion franc rise in reserves was likely supported by a slight depreciation in the franc, a viewpoint echoed by various analysts, pitching themselves against others who interpreted the data as signalling market intervention by the central bank. The franc has, however maintained a very strong position against the ever depreciating euro.
Reuters continued to report that Michael Sneyd, a strategist at BNP Paribas in London had stated “When you do the calculation this is due to the weakness of the franc, causing the reserves to go up.”
“That suggests that the move on the franc in February has been driven by market forces rather than the central bank and also that the SNB is comfortable with current levels” concluded Mr. Sneyd.