Central Banks are thinking outside the box this week, with one aim in mind, and that’s to cheapen their own currency. Unless of course you happen to be in the emerging market category. This morning, there were rumors that the SNB was about to change its floor. This certainly spooked an already nervous market that has been busily applying risk aversion trading stragergies for most of the week. “Viral” is a cheap way to get your business concluded. Japan on the other hand uses surveys.
In the O/N session the BoJ sent out a questionnaire to major banks asking whether they can help it intervene in the currency markets overseas. This action certainly caused a reaction amonst market participants.