SNB FX intervention wording drew market attention after Chairman Schlegel declined to explain why the central bank added the words “if necessary” to its message on currency market action.
During the SNB press conference, Schlegel faced a question about the new phrasing. He was asked why the bank now said its readiness to intervene in forex markets was higher “if necessary.” The question also referred to positive developments in the Middle East and whether that meant less urgency.
Schlegel did not give a direct answer. Instead, he said that, “if necessary their readiness to intervene in forex market is higher,” and added that it was difficult to say whether that was more or less than before. As a result, the Swiss franc weakened further.
SNB FX Intervention Language Changes
The change centered on one part of the SNB’s communication. In its prior statement, the bank said its willingness to intervene in the foreign exchange market had increased. However, in the latest wording, it added “if necessary.”
That shift made the message read as less hawkish than before. Meanwhile, Schlegel’s response did not clarify why the bank changed the language. Therefore, traders focused on the softer tone in the updated wording.
The source article said the franc showed more weakness after his remarks. Notably, the market reaction came during the press conference, when investors were parsing the difference between the old and new language.
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