By TraderVox.com
Tradervox (Dublin) – The Swiss government has endorsed the Swiss National Bank Interim Chairman Thomas Jordan as the new SNB president. This announcement was given yesterday after the policy makers met to discuss the issue. The Swiss franc fell against the euro after this announcement. The decision by the Swiss policy makers has eased concerns that the SNB president would abandon the 1.20 limit cap policy that Jordan has pledged to stick with. Jordan is seen by the market as a proponent for the policy and he has indicated he is willing to do anything to protect the cap.
The policy makers meeting held in Bern announced the decision to the press causing the franc to decline the most against the euro. According to Peter Rosenstreich, a Swissquote Bank Foreign Exchange Strategist in Geneva indicated that Jordan’s ascension officially removes any doubts about the continuity of the policy. Despite the relatively weakness of the franc, the demand for the franc is still high as investors prefer the franc over the euro as risk aversion continues in the market. The continued demand for the Swiss asset will keep strengthening the franc on euro hence the SBN will have to act in the short term to avert another aggression on the imposed cap.
After the naming of Thomas Jordan as the new SNB chairman, the Franc depreciated against the euro by 0.1 percent to trade at 1.2012 per euro. It had earlier weakened the most since April 11 when it went down 0.2 percent.
Some analysts still hold the view that the franc remains expensive against the euro and raising the cap to 1.25 makes good sense. Analysts are expecting to see a raise during this quarter or in the next quarter as SNB tries to keep its policy intact.
Other people who were also appointed are Fritz Zurbruegg who is now the Head of Federal Finance Administration and Jean-Pierre Danthine who is the new Vice Chairman of the SNB.
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