By FX Empire.com
The EUR/CHF moved strongly to the upside on expectations that the SNB will move and extend the monetary loosening and steps to weaken the franc after the weak data and rising deflationary threats.
Swiss National Bank President Philipp Hildebrand said that the bank is ready to take additional measures if the currency appreciates further or the economic status and deflation threats worsen.
The data indeed supported the comments with the CPI dropping 0.1% on the year in October and falling 0.5% in EU harmonized terms while unemployment moved higher to 2.9% from 2.8%.
This weakened the franc and drove the EUR/CHF to the upside on expectations for a move from the bank. The euro surely was not the leading support for the pair as it remained under pressure amid the high uncertainty in Greece and Italy and the political tension is further adding strain on the debt-laden economies and signaling to markets that the crisis is far from over or resolved with the lack of commitment and ability of nations to carry on with the fiscal fight.
We expect more volatility and fluctuations on Tuesday for the pair, especially as we can see an opening gap for the pair that might be covered which will push the pair south, especially if the SNB does not act swiftly which will dip the expectations gradually for raising the floor for the pair.
Originally posted here
