SNB's decision to remove the 1.20 Peg has surely caused an exceptional situation and opened various questions such as
1. Leverage offerted 2. Risk practices 3.Roles of Broker , liquidity provider 4. Stop loss effective ness etc . .
Also whether it was right or not on SNB's part to push this decision as a surprise to Markets.....
But what happens to the drop in Net value of EUR/other Currencies which SNB holds now due to the "De-pegging" ?
For whole 3 years they have been holding this PEG . So i assume they would have bought huge amount of EUR on or above 1.2 to Keep it from falling below .. over these years .. .. The max it reached was 1.26xx and for most of the Monthly candles seems closer to 1.2 there by indicating intervention from SNB continuously ...
So the question is this .... Now that the value of EUR is down , the net value of all the EUR which SNB Bought is also brought down... So where does SNB go from here to make up this loss of Net value ???.. Do they hope to get the price of 1.2 to dump the holdings some time in future ... if so how soon??
1. Leverage offerted 2. Risk practices 3.Roles of Broker , liquidity provider 4. Stop loss effective ness etc . .
Also whether it was right or not on SNB's part to push this decision as a surprise to Markets.....
But what happens to the drop in Net value of EUR/other Currencies which SNB holds now due to the "De-pegging" ?
For whole 3 years they have been holding this PEG . So i assume they would have bought huge amount of EUR on or above 1.2 to Keep it from falling below .. over these years .. .. The max it reached was 1.26xx and for most of the Monthly candles seems closer to 1.2 there by indicating intervention from SNB continuously ...
So the question is this .... Now that the value of EUR is down , the net value of all the EUR which SNB Bought is also brought down... So where does SNB go from here to make up this loss of Net value ???.. Do they hope to get the price of 1.2 to dump the holdings some time in future ... if so how soon??