By FX Empire.com
The EUR/CHF unwound the gains recorded the previous session on Thursday as data helped investors halt bets on soon moves from the SNB, while the uncertainty over the euro outlook and the weekend summit added further volatility and risk aversion which kept the euro weaker.
The data on Thursday was positive from Switzerland, where the trade surplus widened despite the franc gains and confidence improved and both helped suppress bets on a move by the Swiss National Bank.
The market was expecting the SNB to yield to rising calls for more action and trades union calling for the floor to be increased to 1.40, yet with the data in hand investors saw the SNB not responding to calls and pressures.
In general, the focus remains on the euro area and the prevailing uncertainty over what the weekend summit will provide markets, especially as hopes were set high for a final and comprehensive roadmap.
On Friday investors will focus on the finance ministers meeting ahead of the weekend and the end of the week trades will be influenced by any comments, especially that till now the view is uncertain and not clear to what the leaders will agree on, especially as the disagreement between France and Germany over how to expand the firepower of the EFSF is clear and evident strain on the market.
The volatility will continue on Friday and the pair will consolidate with choppy and thin trading, though more downside movement could be seen with the pair well above 1.20 set floor and the euro weakness is likely to persist unless the finance ministers provide any clues ahead of the end of the session.
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