SNB intervenes to break strength in the Swiss franc
The Swiss National Bank intervened overnight following weakness in the single currency after Greece´s surprise announcement, on Saturday, of a 5 July referendum.
As of 08:41 euro/swiss franc was higher by 0.81% to 1.0405.
On Monday morning, the chairman of the Swiss National Bank´s supervisory board, Thomas Jordan, said the country´s central bank had been active in foreign exchange markets overnight.
When queried by Sharecast if Grexit would have an impact on financing costs in the Eurozone periphery Michael Hewson, chief market analyst at CMC Markets UK said: “Yes I believe it would. Mario Draghi said in July 2012: “Whatever it takes to preserve the euro, and believe me it will be enough”. Maybe I should add “except when its Greece…”
Jordan refused to comment on whether the central bank would have to intervene again soon.
Commenting on this past weekend´s events in Athens, Ipek Ozkardeskaya, market analyst at London Capital Group told Sharecast: “If Greece exits the zone, this will naturally mean that the others will be able to do the same also. It will all depend on how severely the country’s banking system and the economy is damaged however. Euro is reversible and may be severely crack with a potential Greek exit. The costs for the other economies will be higher in the short run, given higher volatilities and immediate impact of the Grexit. And this is not needed given the fragile and gloomy economic fundamentals in the Eurozone.”
Also over the weekend, William Dudley, the president of the US Federal Reserve bank of New York told the Financial Times Greek risk is a “huge wild card”. He added: “My personal view is if this goes badly the market reaction may be bigger than what we realise.”