Swiss National Bank Has Come up to Defend its 1.20 Peg for Euro, Buy Nifty Future

Swiss national bank had in month of August 2011 announced to buy unlimited quantities of foreign exchange to defend its currency from further appreciation. However SNB finds that CHF has fair value around 1.35, to protect its export based economy this task has been taken. Traders have noticed spike in EURCHF pair just after Swiss national bank announced, it is going to buy unlimited amount of Euros while selling chf. Just after this news released traders had changed their sentiment and most of retail traders are long on this pair, in fact 96% traders are betting on long wide while just 4% traders are expecting price to fall. Let us also not forget that Swiss economy has seen lots of fundamental weakness hence resulting in selling of Swiss franks. Like unemployment rate rising, GDP contraction, Interest rates at 0 (Zero), CPI (consumer price index) going down. So Swiss economy is deprived of growth at this point of time, where as situation in Europe seems like improving a bit. US Indices are at their 52 week high, however even there we are expecting some corrective phase before we break above all time high level. India’s Nifty future on other hand is also returning to its bullish tone, as FII bets for on-risk-type sentiment; Even china is improving inflation coming in comfort zone, PBC is still waiting for lowering interest rates. Still china appears to be cheapest among the emerging markets, India still not looking attractive due to political uncertainty.

Gold and silver edged higher on continued buying, on MCX gold was able to cross 28,000 mark, while silver on MCX was firmly trading above 55,000 level. MCX Crude also gained as brent crude was trading higher.