Swiss National Bank attempts to keep the franc weak in currency trading
During a recession, a weak currency is often thought desirable. However, few developed nations that trade with major currencies are willing to interfere in the FX market to make it happen. Instead, many countries adopt policies designed to indirectly weaken a currency. The Swiss National Bank, however, appears to be an exception.
The Swiss franc is moving sharply lower against the euro in forex trading, and there is speculation that the SNB might have interfered. Speculation that the SNB has interfered in the FX market in the recent past is also rampant. However, the national bank, as one might expect, refuses to comment.
While there is no solid evidence that the SNB is interfering in the FX market, there is precedent, and monetary officials have warned about using interference as an eventuality if the Swiss franc does not behave as they would like in currency trading.
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