After the news of a “credible” proposal by Tsipras, investors turned to risky assets, which should logically weaken the safe haven Swiss franc . Instead the franc rose close to 2% versus the US dollar or the Yen, and remained fairly unchanged compared to the Euro , the other big winner after the positive Greek development.
The SNB most probably lies behind this move. Indeed the national bank publically confirmed for the first time since the EURCHF floor was dropped, that it intervened in the foreign exchange market on June 29. As the Greek turmoil drastically escalated this past 2 weeks, we have seen safe haven investments outperform such as the Yen, sovereign bonds, or the VIX . The Franc appreciation on the other hand, was clearly tempered as the SNB massively printed (electronically) Swiss francs to purchase foreign reserves, mainly euros. With the euro rising strongly today, the Swiss national bank is taking some of the profits from the operation, by selling euros and buying back the franc, which is probably the fundamental reason why the franc is stronger today.
Longer term, we believe the franc should be weakened as long as risk appetite remains. A deal this weekend would be one large step towards that direction, giving risky assets and the Thomas Jordan a breather. No deal, would probably mean more intervention from the SNB will be needed to attenuate the Franc appreciation.
USDCHF: I favour an upmove. Entry @ 0.9330 (50% Fibonacci level), target 0.97 and stop at 0.9245.