• EUR/USD +0.8%
• USD/CHF -0.9%
• GBP/CHF -0.8%

EUR/USD

Hawkish Statements Give Euro Boost: A more than expected hawkish tone following todayâ�,��"�s anticipated European Central Bank meeting kept the euro bid throughout the day.  Rising to the highest level in three weeks against the greenback, the euro broke through resistance at 1.1950, climbing higher as additional stops were hit beyond the 1.2000 level.  As we head into the Asian session, further upside remains as traders continue to ponder the comments following the expected rise in interest rates this morning.  After increasing the benchmark rate by another 25 basis points, ECB President Jean Claude Trichet switched up the usual rhetoric leading many to believe that a series of hikes may be forthcoming.  Previously remaining â�,��"vigilantâ�,�, the central banker included â�,��"accommodativeâ�,� in the subsequent statements as it becomes increasingly evident that monetary authorities remain preemptive on inflationary pressures.  Looking ahead, market focus looks to be placed on tomorrowâ�,��"�s release of overall economic growth in the Euro zone.  Should gross domestic product rise higher than the consensus, a test of the 1.2200 topside would be imminent.

Rumorville: Bids remain below the current trade at 1.1975 with stops just below at 1.1970.  Further buying interest is residing at 1.1940 with stops just below as well.  Comparatively, selling pressure is coming in at 1.2035 with heavier offers above at 1.2090 and 1.2100 as the intraday move experiences exhaustion.

USD/CHF

Swiss Bidders Follow Suit: Following suit with Euro traders, Swiss bidders came out of the woodwork, driving the currency pair lower on the session.  With more rate increases expected in the European region, the spillover effects look to boost the underlying franc denomination as well.  As a result, the 1.3080 support was no problem for dollar bears as the pair is currently trading at 1.2985.  Additionally boosting the franc was formidable evidence of expansion in the economy.  For the fourth quarter, Swiss gross domestic product rose under estimates, climbing 0.5 percent on the monthly comparison as the annualized comparison rose 2.7 percent.  The increases, although falling below the consensus figures, adds to optimism as the overall yearly figure climbed from the third quarter 2.3 percent and poses clear evidence of mounting growth.  Now, with inflationary pressures still looming, Swiss National Bank Chairman Roth may opt to raise interest rates again, in similar fashion to Trichetâ�,��"�s decision today.  Further pair specific fluctuations will remain dependant on tomorrowâ�,��"�s European data set.

Rumorville: Offers are set for further pair downside at 1.3050 should the price action retrace above the current level.  Beyond that 1.3080 seems to hold heavier pressure.  On the flipside, bids are coming in at 1.2975 with further interest below at the even 1.2900 figure.

GBP/CHF

Pound Carry Trades Unwound: With Swiss bidding strong on the day, the GBPCHF cross suffered under economic data that was less than inspiring and countered previously positive data in the U.K. during the beginning of the week.  Driving the pairâ�,��"�s momentum on the day is the seemingly mounting shift towards exiting carry trade candidates as interest rates rise.  Heavy considerations were previously set for the GBPCHF as the SNB short term rate offered was below zero. However, with inflationary pressures still looming and growth imminent in the Swiss region, traders are unwinding heavy pound positioning.  Further downside is probable for the pair as a another decline in PMI Services is expected according to the Chartered Institute of Purchasing and Supply.

Richard Lee is a Currency Strategist at FXCM.