Swiss franc fallout will last for months, says buy side
Dust will not settle on the SNB's decision until the second quarter
The move to wind down short Swiss franc positions is likely to last for the next few months as liquidity continues to be hard to come by for making large trades in the currency, say market participants.
Liquidity all but dried up on January 15 when the Swiss National Bank (SNB) decided to pull the rug from under its EUR/CHF currency floor, set at 1.20, leading to a 30% drop in the pair before settling around parity. Institutional investors are now struggling to trade in anything other than $5
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