The Swiss Franc's strength has been the symbol of the significant debt imbalances between major economies and diminishing global demand for fiat currencies. Given that deleveraging across the US, the UK and large parts of the Euro zone has much further to run and global financial fragility is growing, this remains a structurally positive environment for the Swiss Franc. This by default means the artificial disincentives created by the SNB will prove costly, which by default invites more political risk into its future actions. If the market was already happy to pay for euro liquidity and capital protection -- through a hefty negative spread between German two-year yields at 0.5% and the ECB's refi rate at 1.5% -- then the SNB's temporary intervention penalty rate on CHF havens might just state the obvious: The market is unlikely to find euro risk more attractive after Tuesday's action.
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