EUR/CHF

Of course but it shouldn't be. My favourite topic "euro weakness" as a reason of the chf strengthness since 4 months sound now even more interesting.

However 1,2 in reality a floor maybe we've talked so much about the peg here that it transformed itself slowly to be a peg in reality. Maybe too many people reading this forum...G'nite everybody

What you think

http://traderspodcast.com/bonus1/

Another aggravating week in EUR/CHF. I am not sure yet, but I am considering cutting my position at a loss on any kind of rally back to, say 1.2030 or so. Reason being is twofold: 1) who knows what will happen as far as the floor – it could fall through, take out all the stops (mine included) and then rally with me on the sidelines, or 2) the time cost. While my money/margin is all tied up in this trade I am missing opportunities in other markets. So at some point you have to ask, is it worth it to hold on to this trade while it puts in paltry 10 pip range days day after day?

Having said that, there’s a case for holding on as well. Reminds me on an old football slogan....Those Who Stay Will Be Champions...or in this case...will be rewarded! I would just hate to cut out of this trade only to watch it rally hard...so then not only would I have taken an unnecessary loss, but I would also miss out on all the gains.

Decisions, decisions....this is a tough one. I am going to have to give it some serious hard thought and then decide.


In running thru scenarios in my mind of what the SNB could possibly be thinking...if they just defend the floor and sit on the bid at 1.20....and just wait for some kind of eventual market rally on its own....what would be the catalyst in EUR/CHF if it is not SNB-assisted? I mean, since last September when they implemented the floor, the only sizeable rallies in the pair were pretty much on speculation that they might raise the floor. I think that card has been played too many times for it to have any meaningful impact anymore. The market seems to have gotten wise and is saying basically, we won’t get fooled again into rallying this thing on floor raising speculation only to be disappointed time and time again. Case in point, last week’s comments by Jim O’Neill of Goldman Sachs...it caused a rally, but nowhere near the size that other comments and speculation had on a possible floor raising prior to. In fact, it only got up to 1.2030 or so before falling back.

So if the rumors won’t raise EUR/CHF anymore, then what will? Perhaps really really bad CPI numbers and other economic data or if the SNB really DOES do something to weaken its currency like capital controls, negative interest rates, etc. – which at this moment, doesn’t sound like will be happening anytime soon (but then again, who knows?). But outside of these two things, I can’t see EUR/CHF rising on its own without SNB assistance. Even a complete resolution in Europe (which we all know is nowhere near being possible) would not rally the pair I don’t think...everyone says EUR good news should support the pair. But this has not been the case as for every EUR rally the market equally or more so sells USD/CHF (buys CHF)...thus keeping EUR/CHF in its tight range.


I was considering that the SNB might eventually do something similar to what the Japan is doing to weaken their currency...stealth intervention (in both quietly defending and then pushing the pair upwards) and/or quantitative easing measures(or other monetary tools to weaken as mentioned above). Not sure if any of this is on the table or not. Oh to have a bugged microphone in on those SNB meetings. lol

It can happen again on 27/4. However, if we see again utmost determination, unlimited, priority… or something similar, we should close this pair.
Hope SNB don’t let the peg like this even if it don’t raise the peg

Great post, i couldn't agree more.

what happens on 4/27?
they have a press conference or something?

They will probably wait until everybody is completely bored, tired, hopeless before intervention.

There was an analysis earlier, that said: the problem not the inflow to chf, rather than the missing outflow. The Swiss money do not invest to EU because of EU crisis. So the balance has changed.

If the SNB/Swiss goverment want to weaker CHF without intervention, (stealth intervention like USD/JPY) they need to raise the outflow. There are some oportunities:

- first thing if SNB will invest to IMF with large money. (http://brucekrasting.blogspot.com/20...-and-g-20.html) If it happens SNB will buy large amount of EUR/USD (26 Billion said) and give it to IMF for EU firewall. This is good because it could push up EUR/CHF for weeks, and secondly help for EU to resolve debit problems. This effect could stronger EURO which is good for EUR/CHF too
- second thing the goverment could inspire swiss investor to invest in EU with real money (change laws/taxes etc..)

If they want to lower the inflow they could use negativ rate, or tax for CHF deposits etc

Let see what will happen today or tommorrow on IMF meeting

Interesting points, Simon. This IMF deal could possibly be the SNB's ticket to weakening CHF in perhaps two ways...1) it would get the IMF off their backs as far as the floor, 2) as you mentioned, a way for the SNB to invest in EUR and send funds out.

The other ideas you mentioned would take, I believe, government approval.....and that could perhaps take weeks or even months to implement if their government is run anywhere like here in the the U.S.

One point I was thinking of with regards to those who think the stops might get taken out before a run up in the pair...

1) when it was breached on the "technicality", the SNB went out of their way to hold a briefing explaining how it was possible for this to happen even though they have a huge bid in at 1.20. In other words, if the SNB truly wanted stops to get taken out, they could have allowed it to happen right then and not given any explanation whatsoever, if the running of the stops was indeed in their plan,
2) Jordan is on record as saying this..."
This commitment applies at any time, from the moment the markets open in Sydney on Monday to when it closes in New York on Friday. We will not tolerate any trading below the minimum rate in the relevant interbank market. "

I don't know...maybe it's highly naive to actually think the SNB would stand by this and not allow (or even manipulate) price thru 1.20 to take out all the stops....but I have to admit....I initially took them at their word that the 1.20 was a safe level to lean on.
We'll see what the following week shall bring us. I'll stick with the trade a bit longer and then reassess from there.

SNB Jordan:Will Defend FX Target for SFR in All Circumstances
By Chris Cermak
--Jordan: Clear that EFSF/ESM 'First Line of Defence,' Not Imf Funds

WASHINGTON (MNI) - Swiss National Bank President Thomas Jordan Saturday reaffirmed the central bank is prepared to engage in "unlimited" currency interventions to defend its minimum exchange rate target of 1.20 SFR per euro in "all circumstances."

"Our monetary policy is very clear," Jordan said in Washington on the sidelines of the International Monetary Fund spring meetings. "The minimum exchange rate will be implemented under all circumstances."

"We have always said that we are prepared to use our balance sheet without restraint. This means unlimited currency interventions to achieve that. That has been our policy until now and will remain our policy in the future," Jordan said.

On Europe, Jordan also made clear that the Eurozone's own expanded firewalls -- the EFSF and ESM -- would form the bulk of any future bail-out packages for European nations. That was a condition for Switzerland and other countries expanding the IMF's own lending power.

"The Eurozone itself will have to be the first line of defense," Jordan said. "If this is not enough, only then will the IMF credit line come into play."

But Jordan acknowledged this did not mean the IMF would not participate in any initial program as it has done with Greece, Ireland and Portugal. This remained "open," he said, "but it is important hier that the bulk of available resources come from the Eurozone."

** MNI Washington Bureau **

Switzerland contributes to the IMF crisis



Finance Minister Eveline Widmer-Schlumpf visited Washington to contribute to the meeting of the International Monetary Fund (IMF). He hopes to help provide strength bias loan to the State which have economic problems.

A telling statement that Switzerland is ready to make a major contribution to international efforts aimed at protecting the global economy of the euro-zone debt crisis. But the Swiss authorities did not explain any details about the contributions. Switzerland is a country that is subject to the agreement of parliament to decide on financial issues.

IMF Managing Director Christine Lagarde told on Friday that he expects the total funding of more than $ 430 billion (SFr392.3 billion) from member countries. Switzerland is one country that has a seat on the 24-strong executive board of the IMF will contribute SFr10 billion, according to an IMF document.

Widmer-Schlumpf, who also occupies the position of rotating President of the Swiss, led a delegation in coordination with the Ministry of Economy Johann Schneider-Ammann and the new Central Bank governor, Thomas Jordan. A number of bilateral meetings are mainly carried out by the head of the United States Department of Justice, Eric Holder, to discuss confidential tax matters and banking are also made according to officials.

Hope this will push the pair above 1.202 on Monday...

Corret me if Im wrong, but as far as I remember the hint that the floor "will be in the future" is a new element in the comomomunication (maybe because his not interim anymore)?

Besides dont you think that these tax deals could change the inflows to chf? Just wondering.

Yes, GBPCHF is the tax deal which has moved the pair also when all the hedge funds are moving the money to London so all the money is going to GBP
The treaty offer so far best is to UK than to Germany,USA,Austria
No other country so far all are bilateral deals.
They still need to be pass by swiss both parliament, USA,Germany parliaments tol become law.. it could take atleast 1 year as per swiss media.. could be by next April...

But yes some of the big hedge funds whose details shared to USA, Germany are not happy with CHF, All the swiss banks details are not shared . Big fishes are safe.

I will bet swiss will weak alot next year.. But this year without breaking floor and taking UP.. next to impossible.
Check my previous link of podocast which explain the best possible scenerios

http://mobile.nzz.ch/;s=tV01CSQuF6WM....16567163.html

Nzz on us tax deal today, do you see any improvements with us eye?

Price stable at 1.2026 now, hopefully this coming week will see some activity

let's see the open price tonight...
I have scalping position opened and 1.2026 would be a good price to close them

people in this thread have been saying this week after week after week after week.... what if price stays in this band till october? you guys will lose all your money to swap

why? your swap negative?

last time i traded this pair was in febuary when the swap was about +2$/Lot/day to hold it long, at last check its $+0.27/lot/day so still positive but i see some people on this thread paying -2