The euro just broke through the 1.20 floor on the EUR/CHF exchange rate floor, throwing the light on the Swiss National Bank to intervene in currency markets.
The strengthening Swiss franc caused the bank to set the floor back in August, as high exchange rates threatened Swiss economic growth.
Investors are wondering if and when the SNB will step in to halt the rising Swissie.
From @finansakrobat, here’s what happened in the EUR/CHF trade just now:
UPDATE: A spokesman for the SNB has told Reuters that the bank will not accept the challenge to its exchange rate floor.
UPDATE II: As it happens, SNB Chairman Thomas Jordan has said that the “best available rate” for the franc never fell below $1.2000, despite orders placed in a “segmented fx market” that were indeed filled below the floor. Technically, they argue that the floor never really broke.
A forex trader consulted by Business Insider confirmed that the SNB’s statements were valid, adding that there are massive bids resting right at the $1.2000 line.
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