By FX Empire.com
Optimism controlled the market on Thursday after European leaders unveiled the measures to contain the crisis, yet still the EUR/CHF moved to the downside as the franc extended the rally against a weak dollar.
The market reacted positively to the new measures which include leveraging the EFSF to almost 1.0 trillion euros, new aid for Greece and including 50% writedown for debt and also capitalization for banks by increasing capital requirements to 9.0% and providing assistance if the bank fails to raise the capital via its own capabilities.
Investors saw the measures strong yet we can see skeptics as the EUR/CHF still lacked the momentum to move higher despite the euro’s rally against its major rivals and especially the dollar. The gains for the franc versus other majors and especially the dollar offset the momentum for the pair and by that assuring that for now the pair will continue to hover in a tight range and is only affected by the SNB and not market forces.
Friday might still see choppy trading and volatility with the end of the week trading, especially that the optimism over the European measures might change any second since investors still do not know the means of implementing the measures or their timing which if delayed long enough might derail the progress made.
Switzerland will end the week with the KOF Leading Indicators for October at 09:30 GMT which is expected to slow to 1.00 from 1.20.
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