The trade day in Asia can pretty much be defined by one currency pair, the EUR/CHF. The day began as routine as any other, but the calm was broken as EUR/CHF slipped from 1.4645 levels to drop to 1.4560 levels in a stop driven move that subsequently pulled risk lower. The EUR/USD was pummeled on this move, sinking from 1.3745 through a reported option barrier at 1.3700 to eventually hit bottom at 1.3670 levels. The moves were violent for Asia, but hardly that bad compared to the moves that transpired over the past 24 hours.
Prior to the moves, the RBA Monetary Policy Meeting was released which showed an upgraded GDP, continued containment of inflation, and upbeat outlooks for Chinese growth, all which left the door open for future rate hikes down the road. AUD/USD remained weighed down, although about 50 pips off of lows from October.
The grand finale EUR/CHF move of the day came almost two hours after the initial one, as the Swiss central bank did something it has rarely done in the Asian session; it intervened directly in the FX market, buying up the Euro as it sold Swiss francs. As the word got out that the SNB was in the market, the EUR/CHF pair exploded, covering big figures in mere minutes as it pulled the Swiss Franc lower across the board. Once the smoke cleared from the vicious moves, the EUR/CHF was trading near 1.4730, while USD/CHF was 80 pips higher at 1.0750, and CHF/JPY shed 60 pips to rest at 83.40 levels. All in all, it was quite a spectacular show to end a busy week in Asia.
The week is far from over however, as later in the day we have the high tier employment data due up in the US in the form of Non Farm Payrolls and the current Unemployment rate. Added to this this weekend brings the G7 meetings in Canada where it has already been mentioned that FX will indeed be a topic of discussion. Have a nice weekend...
