Today the Swiss National Bank announced that they will no longer tolerate a Euro under 1.20, thus putting a ceiling on the franc.

The bank said that: “The current massive overvaluation of the Swiss franc poses an acute threat to the Swiss economy and carries the risk of a deflationary development [and] the SNB is therefore aiming for a substantial and sustained weakening of the Swiss franc”.

The bank also said that to prevail this goal they may buy Euro in “in unlimited quantities” to suppress the Swiss Franc.

The trade we recommended last week is better shown in a chart:

us dollar swiss franc trade chart