"The economic environment worsened again at the end of last year and the growth outlook was lowered"
- Fritz Zurbrügg, a member of the SNB Governing Board
The amount of cash Swiss commercial banks held with nation's central bank edged higher in the week to February 22, a sign that investors are getting less anxious over Eurozone's financial woes. Sight deposits of domestic banks surged to 288 048 million francs last week, up from 285 025 million a week earlier. At the same time the tendency remains negative, proving that the SNB is likely to have less cash to spend to defend the 1.20 per euro cap. Despite the fact, the Swiss Franc trades versus the shared currency around a 1.23 level, the risks for Europe's economy remain too serious to allow the SNB to change its currency cap. However, it is expected that soon the Swiss National Bank could even raise the floor.
"As a consequence of the realignment of the financial centre and the planned withholding tax, we assume that a total of hundreds of billions of francs will flow out of Switzerland," said Juerg Zeltner, head of UBS wealth management.
"The economic environment worsened again at the end of last year and the growth outlook was lowered," Fritz Zurbrügg told the daily Aargauer Zeitung, adding that exchange-rate risks were still on the cards as a result.
© Dukascopy Bank SA