Trading was very volatile on Wednesday for the EUR/CHF after the Swiss National Bank indulged in more easing to offset the pressure on the franc and stem its record appreciation.
The SNB on Wednesday said it will expand the current measures to count the franc’s rally, as the bank decided to expand the sight deposits yet again to 200 billion franc from 120 billion and said would act again if further measures are needed to halt the currency’s strength.
Swissy remained somehow strong and is still holding against the euro with the deepening debt crisis. On Thursday the reaction to the SNB’s move might start to take place as on Wednesday the franc was not much weaker as investors saw the move fell short from their expectations from fix currency rate or a peg as they anticipated.
More measures are to follow from the SNB and the government and although the volatility is high we still see the franc gradually starting to respond to the easing measures by the SNB after it took rates to zero and extended the swap operations to expand the money supply.
The focus will be on the sentiment with the lack of major data on Thursday. We only have the euro area will release the construction output for June at 09:00 GMT following 1.1% slump in May.