The combination of the negative news flow from the Eurozone and last weeks SNB announcement to halt its 9-month old policy of bond purchases has dealt a blow to the EURCHF pair, dragging it to a 9-month low of $1.49. The SNB had acted to stabilize the pair by selling CHF for euros at 1.50 and later at 1.51, where the pair held for 5 months. With SNB pres Roth leaving by year-end and SNB set to withdraw liquidity, we could see the previous floor of 1.5055-60 to serve as a new ceiling, which could further drain Swiss liquidity as markets anticipate policy normalization. German IFO better than exo, helping EURCHF to 1.4980s, but resistance seen at 1.5030. UK Nov deficit & money supply data due at 9:30 GMT. New resistance stands at $1.6250.
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