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15 Jan 2015
SNB cuts Libor target increasing investors' premium for safety – FXStreet
FXStreet (Barcelona) - FXStreet Analyst, Craig Drake, shares that SNB cut its Libor rates today, thereby making the safe-haven more expensive for investors wanting to park their cash in the safety of the Swiss currency.
Key Quotes
“Along with its announcement that it would be removing its long-standing floor in the EURCHF rate of CHF1.200, the Swiss National Bank also reduced the CHF 3m Libor target rate by 50bp from -0.75 and +0.25 to -0.25and 0.25.”
“The CHF Libor had already been driven down below -0.1 percent but today’s move will drive it lower making it more and more expensive for investors to park cash in the safety of CHF.”
“The aim is to limit the overheating of the Swiss currency as talk of ECB QE increases and with it the prospect of European investors wanting to protect their assets from being trashed as the ECB knocks down the euro.”
Key Quotes
“Along with its announcement that it would be removing its long-standing floor in the EURCHF rate of CHF1.200, the Swiss National Bank also reduced the CHF 3m Libor target rate by 50bp from -0.75 and +0.25 to -0.25and 0.25.”
“The CHF Libor had already been driven down below -0.1 percent but today’s move will drive it lower making it more and more expensive for investors to park cash in the safety of CHF.”
“The aim is to limit the overheating of the Swiss currency as talk of ECB QE increases and with it the prospect of European investors wanting to protect their assets from being trashed as the ECB knocks down the euro.”