COMMENT: SNB - FX intervention confirmed, nobody knows on Greece

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Divyang Shah

The Swiss National Bank (SNB) has been intervening in the FX markets since it abandoned the EUR/CHF peg in January, but would never confirm such intervention. However, they have taken unusual step of saying that the SNB has intervened in the FX markets Monday.

Clearly, the SNB wants to shout this out as loudly as possible, in the hope that speculative interest on CHF longs will not build. What is interesting is that the SNB is highlighting that “nobody knows” where things are headed in the Greek situation, highlighting the extreme uncertainty that policy makers and financial markets are having to currently digest.

Given this uncertainty, it has to be said that the markets this morning have been relatively well behaved. However, these are early days and eurozone policy makers and especially the ECB are likely to come under pressure to limit contagion.

SNB President Jordan points to the key source of concern related to Grexit, saying that if a country leaves the euro then we must ask questions about the union.

Divyang Shah
Swiss National Bank