U.S. Markets

Swiss sight deposits jump signals more SNB forex intervention

FILE PHOTO: A Swiss flag is pictured in front of the Swiss National Bank (SNB) in Bern, Switzerland May 2, 2019. REUTERS/Denis Balibouse//File Photo

ZURICH (Reuters) - Sight deposits at the Swiss National Bank rose by 2.77 billion Swiss francs ($2.84 billion) in the week to Aug. 9, suggesting the SNB had stepped up intervention on foreign exchange 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 1.6 billion francs in the week ending Aug. 2 and by 1.7 billion francs the week before.

“I assume the SNB intervened. This is the biggest rise in sight deposits since mid-April 2017,” said Credit Suisse analyst Maxime Botteron.

At that time a Presidential election in France saw French far-right candidate Marine Le Pen stand against now President Emmanuel Macron, fuelling concerns about European politics and driving the franc up against the euro EURCHF=.

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

The franc has recently hit more than two-year highs against the euro as escalations in the Chinese-American trade war spook financial markets.

($1 = 0.9738 Swiss francs)

Reporting by Angelika Gruber, Writing by Michael Shields; Editing by Kirsten Donovan