It Is Not Over Until the Fat Franc Flies?

(This is an excerpt from an article I originally published on Seeking Alpha on June 11, 2012. Click here to read the entire piece.)

As global financial markets seem set to rally in a reflex “risk on” reaction to the bailout of Spain’s banks, one small corner of the financial universe remains notably somber: the euro/Swiss franc currency pair (EUR/CHF). {snip}

Whether daily…


EUR/CHF continues to hug the Swiss National Bank's 1.20 floor
EUR/CHF continues to hug the Swiss National Bank's 1.20 floor

…or hourly…


EUR/CHF bounces around after trading starts post-Spanish bailout but the volatility is well within current tight ranges
EUR/CHF bounces around after trading starts post-Spanish bailout but the volatility is well within current tight ranges

Source: FreeStockCharts.com

…the Swiss franc continues to act as a fat, heavy weight pressing EUR/CHF almost as low as it is allowed to go (the 1.20 floor established by the Swiss National Bank).

I am expecting the franc to weaken against the euro the moment the market is convinced the eurozone crisis is on its way to resolution. {snip}

Be careful out there!

(This is an excerpt from an article I originally published on Seeking Alpha on June 11, 2012. Click here to read the entire piece.)

Full disclosure: long EUR/CHF, short EUR/GBP, short EUR/JPY, long FXF

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