The Wall Street Journal reported that it obtained information from sources that the reason behind the Swiss franc plunging 40 pips within a minute against the euro in the US trading session today was because of an error by a trader.
EURCHF spiked to 1.2128 at 9:38 am New York time from 1.2094 before immediately dropping back down to 1.2091.
Many questioned whether it was the Swiss National Bank that had intervened, especially because the euro has been hovering so close to the 1.20 franc peg against the euro. But it was soon reported that it was mere human error and traders in London reported that an incorrect price had been entered into a dealing system, triggering the spike.
“The market was confused about the bid, which may be due to a system error,” says Quaesta Capital trader Damian Zihlmann in Zurich. The euro backed off its high as traders realized the buying interest was not from the SNB and would not be sustained, he added.
Traders have been on alert all this month for any sign of a possible SNB intervention since a broadly weaker euro has left it hover so close to the tolerance limit that was set in September last year, in an effort to protect Swiss exporters.