The National Bank will continue to resist Swiss currency gains and there is the high probability that there will be further intervention to weaken the currency if it threatens to strengthen through 1.50 against the Euro. The intervention threat will also tend to limit the scope for wider Swiss currency gains. The franc could still gain support if risk appetite deteriorates. Overall, from a medium-term perspective, the dollar looks to offer significant value at levels below 1.0650 against the franc.

The dollar was unable to break above 1.09 against the franc on Tuesday and then weakened sharply in US trading with a low below 1.0650. The Swiss currency was still resilient against the Euro during the day. Overall, the franc is still proving highly resilient to selling pressure and there will be further speculation over National Bank intervention to curb gains if it advances further.

The dollar remained firmly on the defensive in early Europe on Wednesday. The National Bank intervened during the European session and there was also further reported franc selling by the BIS. The intervention appeared to be aggressive and the franc weakened sharply to lows beyond 1.52 against the Euro. The dollar also recovered strongly to a high just above the 1.09 level.