Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
Dollar Finds Limited Haven Status after Swiss Central Bank Surprise

Dollar Finds Limited Haven Status after Swiss Central Bank Surprise

John Kicklighter,

Talking Points:

  • Dollar Finds Limited Haven Status after Swiss Central Bank Surprise
  • Swiss Franc Surges after SNB Surrenders EURCHF Floor
  • Euro Loses a Buyer, Attention Turns to the ECB Next Week

Dollar Finds Limited Haven Status after Swiss Central Bank Surprise

The Forex market suffered perhaps its biggest shock in decades, but the Dollar drew conspicuously limited safe haven flow. On the news that the Swiss National Bank (SNB) had surrendered its efforts to maintain a cap on its currency versus the Euro, European currencies exploded in activity. In turn, short-term (one-week) volatility in the FX market surged by approximately 35 percent and continued to swell through Asia trading Friday morning to hit levels not seen in three years (14.9 percent). Yet, as extraordinary as the market activity was, the favored currency for liquidity would see limited appeal. Though the Dollar generated gains against the Euro and Pound, its performance elsewhere was either mixed or negative. The fear didn’t fully ripple out to the capital markets either.

The S&P 500 took a tumble and eventually closed below 2,000 – the floor of a two-year rising trend channel – but immediate follow through was limited through. However, as robust as markets seem in the immediate wake of the ‘black swan’ event, the risk implications run deeper. With the proliferation of capital and real market leverage, the reach for yield in risky assets and the dependency in low volatility; this is a serious crack in the façade of confidence. Much of the market’s exposure is either explicitly or implicitly reliant on assurance crafted by central banks accommodation. Seeing a failure of this magnitude shows the policy authorities are not infallible, that conflicting monetary policy (some would say ‘currency wars’) adds new troubles and reminds that the Fed is rolling back its own pledge as it moves towards normalization. Top event risk for Friday’s session is December CPI, but markets will remain preoccupied with concerns of ‘risk’ and the Fed’s meet January 28.

Swiss Franc Surges after SNB Surrenders EURCHF Floor

The Swiss National Bank did the unspeakable for a major central bank: it triggered extreme volatility in the currency market. Maintaining stability in exchange rates and domestic financial markets is a key role for policy authorities, but the SNB did little to blunt the pain. In an unexpected announcement, the bank announced it was abandoning its three-year policy of holding up a floor on EURCHF at 1.2000 and that it was lowering its interest rate to -75 percent (a target range of -1.25 and -0.25 percent). The announcement was a surprise, the means for which it was done was a shock. There are few good ways to abandon a key policy such as this, but communication is exceptionally important. Rather than back off its commitment to the policy or take small steps to dull its impact, SNB Vice Chairman stated as recently as Tuesday that the floor was a key tenet of their policy and the group summarily announced the change.

The reasoning behind this uncharacteristic move by a major central bank renowned for its steadfastness may signal another fold in the financial system. Against a future of buying a Euro that would continue to tumble under an expansive ECB stimulus program while only keeping the rate unchanged, the risks seemed large. However, they were not new nor unknown. This may be intended to serve as a warning on the consequences of competitive monetary policy or a necessary response to an impending threat like ECB QE.

Euro Loses a Buyer, Attention Turns to the ECB Next Week

From the SNB’s move, many traders are drawing the conclusion that Swiss officials are either very concerned over – or perhaps have knowledge of – a much more substantial stimulus program coming from the ECB in the near future. Given the public debate over the merits of a full-scale QE program and the policy meeting scheduled for next Thursday, concerns are clear. Expectations for a move next week are now likely very high, and one of the few steady bidders on the Euro (the SNB) is gone. Expect a very volatile week for the Euro next week.

Japanese Yen Crosses Drop on Central Bank Backdrop

Yen crosses dropped across the board Thursday as a swell in FX volatility unnerved longs that are dependent on an anemic yield and quiet market conditions. While other asset classes and benchmarks (S&P 500 for example) may be a few steps out from the epicenter, the sensitivity to volatility, central bank policy and the unknown is very high for these carry trades.

Pound a Haven for Europeans but Liability Elsewhere

There was a distinct divergence in performance for the Pound against European currencies and non-European currencies. For Europe, the Pound is a considerable haven to Swiss volatility and Euro-area financial/economic uncertainty. In contrast to Asian and American currencies, it shares the stain of risk from its neighbors. EURGBP and GBPUSD will act as good, dual divining rods of the Pound’s performance.

Emerging Markets: Russia to Open Wealth Fund to Reinforce Ruble

Emerging Market volatility jumped over six percent Thursday – far less than the broader FX market’s own activity levels. With the MSCI EM ETF essentially unchanged Thursday, we have another perimeter measure of risk from central bank policy fallout. Meanwhile, local effort to offset the Dollar’s march higher (and the Ruble’s drop) saw Russia announce it would tap its $88 billion Reserve Fund to fight the one-direction move.

Gold Jumps to Four-Month High as Currency Market Shudders

At the sound of a ‘currency shock’, gold comes calling. The precious metal found one of its strongest fundamental bids since the global central bank collective was in the early phases of its unconventional policy appetite. It is worth noting that the dramatic volatility from the Franc generated far more bullish traction than the BoJ’s stimulus efforts. Instability is the ultimate spark for this FX alternative.

**Bring the economic calendar to your charts with the DailyFX News App.


23:50JPYTertiary Industry Index (MoM) (NOV)0.20%-0.20%
23:50JPYJapan Buying Foreign Bonds (JAN 9)¥19.7BJapan has been buying foreign stocks at positive rate after the BOJ Stimulus in October 2014.
23:50JPYJapan Buying Foreign Stocks (JAN 9)-¥40.7B
23:50JPYForeign Buying Japan Bonds (JAN 9)-¥26.3B
23:50JPYForeign Buying Japan Stocks (JAN 9)-¥40.7B
2:00NZDNon Resident Bond Holdings (DEC)66.50%Has been rising in the past 5 years.
7:00EUREU 25 New Car Registrations (DEC)1.40%
7:00EURGerman Consumer Price Index (MoM) (DEC F)0.00%0.00%These measures aren’t likely to be market moving as they are final revisions.
7:00EURGerman Consumer Price Index (YoY) (DEC F)0.20%0.20%
7:00EURGerman Consumer Price Index - EU Harmonised (MoM)0.10%0.10%
7:00EURGerman Consumer Price Index - EU Harmonised (YoY)0.10%0.10%
8:00CHFRetail Sales (Real) (YoY) (NOV)0.30%Not likely to be market moving.
10:00EUREurozone Consumer Price Index (MoM) (DEC)-0.10%-0.20%These measures aren’t likely to be market moving as they are final revisions for the month of December. Next week’s ECB meeting on Jan 22 will be watched by the market.
10:00EUREurozone Consumer Price Index (YoY) (DEC F)-0.20%0.30%
10:00EUREurozone Consumer Price Index - Core (YoY) (DEC F)0.80%0.80%
13:30USDConsumer Price Index (MoM) (DEC)-0.40%-0.30%Inflation figures are important as the Fed looks to inflation when deciding on policy. Currently, inflation is below the 2% target. With lower oil prices, the Fed expects that inflation may dip in the short run, but climb up to 2% in the long run.
13:30USDConsumer Price Index Ex Food & Energy (MoM) (DEC)0.10%0.10%
13:30USDConsumer Price Index (YoY) (DEC)0.70%1.30%
13:30USDConsumer Price Index Ex Food & Energy (YoY) (DEC)1.70%1.70%
14:15USDIndustrial Production (DEC)0.20%1.30%Has been growing at a positive pace every month in 2014 except August.
14:15USDCapacity Utilization (DEC)80.00%80.10%Has been rising in 2014 as the US economy strengthens.
14:15USDManufacturing (SIC) Production (DEC)0.20%1.10%Has been showing expansion in 10 out of the 12 months in 2014.
15:00USDU. of Michigan Confidence (JAN P)94.393.6Has been increasing with the strength of the US economy in 2014. Last figure was the highest since June 2005.
21:00USDTotal Net TIC Flows (NOV)$178.4BUS financial assets look more attractive to foreign investors as the US economy is recovering and the Fed is getting ready to hike rates while the rest of the world is keeping policy loose.
21:00USDNet Long-term TIC Flows (NOV)-$1.4B
GMTCurrencyUpcoming Events & Speeches
9:00EURECB's Costa Speaks at Conference on Adjustment of Economics
12:50USDFed's Kocherlakota Speaks on Economy and Monetary Policy
16:00USDFed's Williams Speaks in San Francisco
18:10USDFed's Bullard Delivers Presentation on U.S. Economy and Monetary Policy


To see updated SUPPORT AND RESISTANCE LEVELS for the Majors, visit Technical Analysis Portal

To see updated PIVOT POINT LEVELS for the Majors and Crosses, visit our Pivot Point Table


Resist 215.59002.500012.70007.81651.3650Resist 28.74006.85008.4735
Resist 115.00002.400011.87507.80751.3475Resist 18.13756.33257.8360
Support 114.38002.190010.25007.74901.3200Support 17.52005.91007.2945
Support 213.68002.07009.37007.74501.2000Support 27.32855.77756.7280


Res 31.19861.5261120.521.02251.19330.81590.7844143.031243.42
Res 21.19571.5229120.171.01981.19070.81360.7820142.621236.80
Res 11.19281.5198119.831.01721.18810.81130.7796142.221230.19
Supp 11.18121.5072118.431.00661.17770.80190.7702140.601203.71
Supp 21.17831.5041118.091.00401.17510.79960.7678140.201197.10
Supp 31.17541.5009117.741.00131.17250.79730.7654139.791190.48


--- Written by: John Kicklighter, Chief Strategist for

To contact John, email Follow me on twitter at

Sign up for John’s email distribution list, here.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.