JPM says to sell USD/CHF ahead of the FX manipulation report

Another reason to sell the US dollar

There is no set date for the Treasury’s FX manipulation report but it is due out soon and analysts at JPMorgan says it may contain a message for the Swiss.

“Switzerland presents an obvious risk of an outright labeling” by the
Treasury Department, “which may further frustrate the SNB’s ability to
intervene and recycle its large current account surplus,” JPM analysts wrote in a note Friday.

They suggest selling USD/CHF at 0.9240, with a stop level at 0.9500. 

I don’t see the same risks given that Switzerland openly defended 1.20 in EUR/CHF for years without Treasury making any significant noise.

JPM also highlights the risk of broader USD weakness, especially if Congress fails to pass another stimulus package. On Saturday, Republican leaders in congress said it could take 3 weeks to send a bill to the House. Benefits expire this week.

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