London had left the cross around 1.4650 and CHF strength continued to 1.4560. Bids came in, not illogically assumed to be the Swiss National Bank (SNB), driving it back above 1.4700. A typical intervention on the EBS platform, you’d think. And then suddenly it was bid 1.4905...
I’m hearing that this was also the work of the SNB, which, if true, makes it one of the most stunningly inept instances of intervention the market has seen. It is one thing to make it clear that there is a level beyond which you don’t want the currency to strengthen; and quite another to bid two big figures above the market, let it trade more than 100 times and then retrace all the way back to 1.4700 by the London opening.
Few banks in Asia have credit limits for the SNB: they don’t need them as they so seldom see the name. But those who do have limits are usually the ones who get hurt as the central bank intervenes. However this time there was some payback as a two-tier market was created with those who could see the 1.4905 bid merrily giving it and taking the 1.4750