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Swiss sight deposits suggest stepped-up SNB forex intervention

Swiss sight deposits suggest stepped-up SNB forex intervention
FILE PHOTO: 1,000-Swiss-franc banknotes lie in a box at a Swiss bank in Zurich, Switzerland, April 9, 2019. REUTERS/Arnd Wiegmann -
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Arnd Wiegmann(Reuters)
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ZURICH (Reuters) – Sight deposits at the Swiss National Bank rose by nearly 4 billion Swiss francs (£3 billion) in the week to Aug. 16, suggesting the SNB had again stepped up intervention on forex markets to rein in the safe-haven currency.

Sight deposits held by commercial banks at the central bank — a proxy for currency interventions — had risen by 2.8 billion francs in the week to Aug. 9, 1.6 billion in the week ending Aug. 2 and 1.7 billion the week before.

“It is clear the SNB is intervening again and is trying to put the brakes on the appreciation of the franc,” said UBS analyst Alessandro Bee.

Sight deposits have risen by around 10 billion francs since early July.

The SNB declined to comment on the rise in sight deposits.

The franc has hit more than two-year highs against the euro <EURCHF=> as an escalating Chinese-American trade war, a global economic slowdown and prospects for a no-deal Brexit spook financial markets.

The euro was trading at 1.0870 francs, down 3.5% over three months.

(Reporting by Angelika Gruber, writing by Michael Shields, editing by John Miller and Toby Chopra)

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