EUR/CHF

http://www.snb.ch/en/ifor/media/webtv/id/webtv

SNB'S JORDAN: Nations must implement budget cuts to avert default. European situation is "extremely alarming".

SNB'S JORDAN: Debt crisis is "difficult, painful" to overcome.

Nothing fancy


ICH (Dow Jones)--The sustainability of government finances is key to any country's economic competitiveness as well as the maintenance of social cohesion and services, Swiss National Bank interim president Thomas Jordan said Tuesday.
"The most important criteria for any fiscal rule is broad-based political and popular support, and experience in the euro zone has shown that rules which don't enjoy this support are doomed to failure," Jordan said Tuesday in a text prepared for delivery at a podium discussion on debt and the culture of stability, organized by the Neuer Zuercher Zeitung.
Jordan made no reference in his speech to current Swiss central bank monetary policy, or its decision to set a 1.20 Swiss franc per euro ceiling on its currency.
The SNB introduced the CHF1.20-per-euro cap in September to try and check the Swiss currency's appreciation to help alleviate the pressure on the country's exporters and head off the risk of deflation.
Switzerland, which posted a 2011 budget surplus of 1.9 billion francs ($2.1 billion) as robust economic growth in the first half of the year boosted government tax income, was one of the best performing economies in Europe with demand for its products helping to push its unemployment rate to a two-and-a-half year low of 2.8% in July.
The Alpine country voted in a referendum in 2003 to introduce a "debt brake" mechanism, which has since been replicated by countries like Germany.
Attempts by the European Union to curb fiscal indiscipline through its growth and stability pact rules saw a lot of "creative book-keeping" in an attempt to cast individual budgets in a more favorable light, Jordan said.
"However not all countries have suffered from the breaching of fiscal rules, and nations like Switzerland, Sweden, Finland, the Netherlands, Canada and Chile have had favorable experiences with fiscal rules," he said.
An important characteristic of such rules are their transparency, and the effectiveness of their supervision, Jordan said.
"A further important feature of the Swiss political tradition is the direct democratic involvement in budgetary affairs, particularly at the community and municipal level, which acts as a brake on government debt creation," Jordan said.

The sustainability of government finances is key to any country's economic competitiveness as well as the maintenance of social cohesion and services, Swiss National Bank interim president Thomas Jordan said Tuesday.

"The most important criteria for any fiscal rule is broad-based political and popular support, and experience in the euro zone has shown that rules which don't enjoy this support are doomed to failure," Jordan said Tuesday in a text prepared for delivery at a podium discussion on debt and the culture of stability, organized by the Neuer Zuercher Zeitung.

Jordan made no reference in his speech to current Swiss central bank monetary policy, or its decision to set a 1.20 Swiss franc per euro ceiling on its currency

No end to the debt society without a culture of stability

Thomas Jordan, Vice-Chairman of the Governing Board of the Swiss National Bank
NZZ Podium, Zurich, 28.02.2012

The most recent financial and economic crisis has resulted in an unprecedented rise in public debt. However, a chronic tendency towards deficits and higher indebtedness has already been observed in a number of countries for the past few decades. Excessive public debt has a negative impact on long-term economic growth, and deprives a country of its freedom of action during a crisis. Sound state finances are thus essential for ensuring an economy's competitiveness and maintaining its social security system, and hence also for social solidarity. Last but not least, excessive public debt also poses a serious threat to price stability and monetary policy independence.
Yet how can state budgets be consolidated over the long term? There are limitations on how far fiscal policy powers can be delegated to independent groups of experts. Because fundamental decisions on taxation or expenditure - unlike monetary policy - are aimed at redistribution, they have to be taken at the political level. Even fiscal rules such as a deficit cap or debt ceiling can only achieve a lasting improvement of budgetary discipline if they are supported by a broad political consensus on the advantages of sound finances. Switzerland is a good example of this: thanks to the inclusion of the major political players in government responsibilities, and to the extension of direct democracy processes even to financial matters, a deeply rooted culture of stability has developed. It is this which provides the foundation for the stabilising effect of the well designed and constitutionally anchored debt brake. This has made a decisive contribution to ensuring that federal government finances are in good shape despite the financial and economic crisis.
As a general rule, any efforts to establish a sustainable fiscal policy in countries with debt problems can ultimately only bear fruit if they succeed in fostering a broad-based culture of stability.

I'm kind of glad he left out any mention of the 1.2000 floor.

In the past it was starting to sound like a kid always threatening "I'm gonna punch you...I'm gonna punch you". In my opinion the policy just won on credibility, even though the market is saying something different at this moment.

Oh well, back to waiting...and that crappy flatline RSI in the 30 minute chart.

Good trades a plenty for all.

nothing

No rumors here?

After all...

DJ MARKET TALK: SNB Sticks To Policy Script, But Nods To Eventual Change
28-febr.-2012

3:03 (Dow Jones) SNB Interim President Jordan said during a discussion in Zurich that the central bank would continue to enforce its EUR/CHF floor of 1.20 as long as the euro zone's debt uncertainty persists. The SNB has always been frank (no pun intended) about the safe-haven impact on the franc, yet Jordan's remark may be the first hint of a timetable on when the central bank might end its 1.20 floor policy. Presumably, the SNB won't enforce a floor should the franc begin to reflect fundamentals rather than voracious demand for safe-haven buying. EUR/CHF flat around 1.2050; USD/CHF down 0.40% at 0.8954.

So SNB will exit the floor policy when they do not need the floor policy!
Brilliant!

Also, He made a case for strong franc


SNB interim President Jordan made a good case today for owning currencies of governments that have clear, enforceable fiscal rules, such as Switzerland's debt brake, rather than in those w weak fiscal controls (thinks much of pre-crisis Europe). While reaffirming central bank independence and the SNB's 1.2000 floor for EUR/CHF, his other remarks seem more like a sales pitch for selling EUR/CHF, or at least buying francs again currencies where govt fiscal controls are weak. The US and Japan fall into that general category as well. USD/CHF closed lower today, though month-end rebalancing, oversold techs, and pre LTRO and Bernanke testimony cautiousness kept Friday's 0.8931 trend lows from falling prey. US Durables, less German leeway for future bailouts, and an Irish referendum on the new EU fiscal Treaty boosted USD/CHF early, while a surge in US Consumer Confidence and hopes for more LTRO-driven risk flows quickly rejected a stop-running exercise above 0.9000. EUR/CHF's stuck just above 1.2000 with bids at 1.2025-35. Swiss KOF and CPI are on tap Wed, but LTROs and Bernanke are the keys. Randolph.

Want to close position at breakeven 1.2060 If it reaches this week
I will close
Reopen next week.
Not making sense to keep the position at 1.2060

SNB: SNB acting chief Jordan reiterating remarkls about Chf massively
overvalued and reasserts SNB to commit unlimited resources to defend
peg.

- "We can't allow the franc to appreciate beyond the CHF1.20 per euro ceiling we have set for it," Jordan said during a podium discussion Tuesday.

- The introduction of the minimum rate has helped correct some of the franc's overvaluation but the Swiss export sector still faces competitive issues, he said.

- "The SNB will continue to pursue its franc policy to prevent any risks to the Swiss economy developing," Jordan said.

- "The franc is still strong, but we expect it to weaken over time," he said.

Source.. Most of some data posted are only on some forex site.
Not many leading news sites have this news.

lost faith?

nops,,This week is bad week for trading, I am not able to trade much my ma rgin is struck so not able to trade with comfort that I do normally
I think I can get a better entry later

Also, I believe if there is any attempt to break floor it will friday or monday so don't want to keep big positions opened

After the speech the EURCHF is not falling so why should you close your position... SNB still commited to 1.20 floor and expecting the CHF to weaken over time till the floor is not needed, can't be any clearer than that.

Sources:

https://mninews.deutsche-boerse.com/about-us
http://www.dowjonesnews.com/newdjn/logon.aspx?AL=N

Thanks.. I follow tweets from them
Website seems to be paid

DJ Newswires costs 2 EUR / month and MNI fx bullets is included in the service at my broker that is saxo bank. I think brokers can give you this service much cheaper compared to the website of the service provider.

I'm not really satisfied with saxo because of negative daily fx rollover for eur/chf and a "dealing desk".