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Swissie safe haven flows likely temporary

Posted by WorldWideMarkets . on May 24, 2013 3:45:00 AM
bearish trendLike the yen, the Swissie saw some safe haven flows as stocks around the world suffered setbacks on the China factory data but the overall trend remains bearish for the Swiss unit. While investors can hurt in any asset class on a day to day basis, fighting a central bank is never a good strategy in the long term. Reiterating that Swiss National Bank Chairman Thomas Jordan says the Swiss central bank is committed to the cap it imposed on the franc in 2011 and could adjust the level of 1.20 per euro if necessary, He added this week the bank is ready to buy foreign currency in unlimited quantities if necessary. And while the Swissie gained Thursday there just was not that much risk aversion despite the volatility. The euro, aussie and kiwi all saw gains against the dollar. In the aussie’s case there was clearly not too much trepidation about the China data, given China was and is the Australian target for the export boom. Investors after weeks of gains in say the dollar against other units were ready to pull the pin but the fundamentals do not appear to have shifted far enough, if at all, to talk about an end to recent trends.

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