Euro on the ropes and facing a major fight

Markets were caught completely off guard last week by the surprise decision of the Swiss Central Bank (SNB) to abandon its currency cap of CHF1.20 against the euro.

It is widely seen as a pre-emptive move by the SNB ahead of the expected announcement of a large QE government bond purchase programme by the ECB later this week.

The SNB obviously decided that such a move by the ECB would make it very difficult to continue to defend its currency ceiling, something it had said only last month that it would enforce with the utmost determination.