At this stage, they’re put in a tough spot. With markets facing extreme turbulence and dislocations, the franc has been one of the key beneficiaries – and still is. It will be a waste to burn their reserves in fighting back until the fundamental landscape changes.
But the longer this persists and the more the franc strengthens, the likelihood of a return to negative interest rate policy is ever increasing for Switzerland.
This article was written by Justin Low at www.forexlive.com.
