Looks like the Swiss National Bank (SNB) tried to have the last laugh on this April Fool’s Day with another attempt to arrest the appreciation in its currency. This intervention was impressive with a 240 pip pop (2.3% move overall), but it only brought the currency back to last week’s trading levels.
Source: dailyfx.com charts
The SNB has tried different timings for its interventions to maximize the surprise. This time the SNB struck as folks trading on European hours were closing down for the three-day holiday (I was suspecting they might try for the holiday itself, either Friday or Sunday evening). However, the apparent intervention lasted only about 10 minutes and, once again, the market vigorously faded the move. When I speculated that the SNB would try a few last gasp interventions, I thought it would move with large and overwhelming force. Today’s action does not quite qualify; for example, I would have expected a more sustained intervention rather than a quick burst. Perhaps more is yet to come in the next few days.
Regardless, I have now become more impressed with the market’s insistence and persistence at supplying the franc with strength. The market is making these interventions look more and more futile and useless. Accordingly, I am gradually shifting from trying to play these interventions to playing the trend. Kudos to the big money guys who keep buying francs against the wishes of the SNB!
Be careful out there!
Full disclosure: long EUR/CHF, long USD/CHF, short GBP/CHF