From early February to late March EUR and CHF moved more or less in parallel. Since then, the Franc has been performing much better than the European single currency. Ulrich Leuchtmann, Head of FX and Commodity Research at Commerzbank, analyzes what is driving the EUR/CHF pair.

The risk of losses resulting from CHF longs is very limited 

The threat of interventions implies that the risk of losses resulting from CHF longs is very limited (‘SNB put’). A situation like that can easily turn into a focal point at which large volumes of speculative demand can accumulate.

There is no support for the view that this CHF strength had anything to do with the US Dollar. Sometimes the franc appreciates even if the dollar appreciates and sometimes when the dollar weakens.

‘That is driven by USD/CHF’ implies a causality, with the Greenback acting as a cause. This view is not supported by reality.