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BIS Paper Sees Some Evidence EUR/CHF Floor Break was Signalled
Given how the EUR/CHF cross collapsed immediately following the removal of the pair’s artificial floor by the Swiss National Bank (SNB) in January 2015, it would seem an obvious answer to the question, “was the event expected” would be “no”. The cross fell from its SNB-imposed floor at 1.2000, hitting 0.7000 at one stage before the “official” low was set at 0.85, finally settling around 1.05. A new paper published by the Bank for International Settlements (BIS), however, studies events in the FX market leading up to the removal of the EUR/CHF floor in January 2015, and while it is not conclusive, it does find evidence that some option markets were predicted the break lower in the cross.

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