The SNB kept accumulating its currency reserves in June, thus reflecting its policy aimed at curbing the strengthening of the Swiss Franc against the common Euro currency.
In May and June 2012, the Swiss national Bank spent ₣59 and ₣66 bn on Euro purchases. As of late June, the SNB’s reserves reached ₣359 bn.
Despite the fact that such activities help the eurozone economy and currency to stay afloat, the SNB’s steps keep raising serious concerns in the Swiss society. According to the research conducted by TagesAnzeiger and NZZ, Switzerland’s currency reserves have just reached 625 of last year’s national GDP. Nevertheless, there are countries with much bigger ratio. In particular, in Denmark it is 162%, in Singapore – 112%.
According to the currency strategists at Sarasin, the situation is not so critical. It won’t cause any major problems. They say the SNB should keep implementing its policy until the eurozone economy starts recovering. However, the bank will have to react, if the pace of the dynamics starts accelerating.
At the same time, the SNB confirmed its intension to defend the 1.20 level in the market of EURCHF. Thomas Jordan said there was no alternative policy.
Forex.
According to , USDCHF keeps elongating the bullish move, which is represented by wave 3/С of level Daily2. At this point, the currency pair is forming wave C inside the “Hound of the Baskervilles” pattern by Elder/MF.
The closest levels of resistance are located at 0.9879 and 0.9928/32. The current move will be completed if the price breaks below the bottom of the MF sloping channel and consolidates below the MF pivot 0.9774.
