FX Weekly: 19th September

• EUR/CHF volatility is at extreme lows as SNB presence weighs on speculative trading volumes

• Last week’s relief rally in EUR pairs has disintegrated over the weekend following a lack of a sufficiently positive outcome from Ecofin/G7 meetings

• This week peripheral events are of most concern once again - a lack of synchronisation between the economic and political responses to the ongoing sovereign debt debacle is hindering its resolution and raising intra-day volatility on EUR pairs

• BoE minutes could set the stage for further asset purchases (QE) although highest probability is for such issues to be made public and clarified in the quarterly inflation report due in November. If data deteriorates between now and then, BoE may have no other choice but to succumb to market expectations by announcing QE at its October meeting

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