Just a question - how much did SNB spent in Sep 2011 when they peg CHF to 1.20?
I guess not much.
They just mentioned they "cannot tolerate anything below 1.20" & the pair jumped in <1 hr to 1.20.
But they did spend a lot defending the peg.
Unlike BoJ, they spent a lot to weaken the yen. Direct monetary intervention.
So now (if I'm correct above), SNB can just use verbal intervention to raise the peg.
or just use a verbal scare tactic like "SNB may consider raising the peg to 1._____". A named figure in a press conference will definitely spook speculators to automatically buy & long eurchf and weaken chf automatically. Just say it, don't do it yet.
I guess not much.
They just mentioned they "cannot tolerate anything below 1.20" & the pair jumped in <1 hr to 1.20.
But they did spend a lot defending the peg.
Unlike BoJ, they spent a lot to weaken the yen. Direct monetary intervention.
So now (if I'm correct above), SNB can just use verbal intervention to raise the peg.
or just use a verbal scare tactic like "SNB may consider raising the peg to 1._____". A named figure in a press conference will definitely spook speculators to automatically buy & long eurchf and weaken chf automatically. Just say it, don't do it yet.