Will the Swiss Intervene Again in Currency Trading?

As the Swiss franc gains, the SNB threatens intervention in the FX market

Not too long ago, the the Swiss National Bank engaged in direct intervention in currency trading on the FX market. The plan was to make the Swiss franc weaker in forex trading. And it worked. In times of recession, weak currencies are desirable, and the Swiss were the only ones who actually directly intervened to weaken their currency.

However, the Swiss franc has been on the rise again, regaining much of its lost ground. This news is not pleasing Swiss policy makers at all. Indeed, members of the Swiss National Bank’s board made it clear that a policy of franc weakness is still in effect. Further intervention measures will be take, if needed, to keep the franc down.

Another factor that might help keep the franc down is the continued reports of an improving global economy. The Swiss franc has been used as a safe haven investment in the past, but with risk appetite growing, such a role is less likely to be needed.