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EUR/CHF

  • #8,721
  • Jul 24, 2012 5:36pm Jul 24, 2012 5:36pm
Quoting didi_doedel
http://snbchf.com/2012/06/the-other-...yields-double/

This old article calls SNB's current policy a suicide:
http://snbchf.com/2012/06/a-central-...n-august-2011/

So if you say that giving up the peg is suicide and this article says that continuing the peg is suicide, then SNB committed suicide in the past already.

The end of pegging could come when the Year-on-Year inflation gets clean of the pegging artefact in Sept...
Yeah we already know George Doran magic.
Too bad he never forecasted well...he was in short but not anymore...
And he was already forecasted inflation for the summer, see monthly cpi data.
Maybe he's a bit like Rubini, theres a point in his talk, but the market goes opposite way...
  • #8,722
  • Jul 25, 2012 12:58am Jul 25, 2012 12:58am
I try to guess the SNB intervention of this week.

Just by looking at the EUR/CHF chart in combination with the news I guess that SNB intervention will be largest one we have seen so far.

Does anyone have a better crystal ball? E.g. info from Swiss banks?
  • #8,723
  • Jul 25, 2012 1:03am Jul 25, 2012 1:03am
Quoting didi_doedel
I try to guess the SNB intervention of this week.

Just by looking at the EUR/CHF chart in combination with the news I guess that SNB intervention will be largest one we have seen so far.

Does anyone have a better crystal ball? E.g. info from Swiss banks?
I have no inside information but I just don't see any intervention coming.

The data from the Swiss economy has been mixed but better the only thing of real concern to them will be the escalation of the euro crisis.
  • #8,724
  • Jul 25, 2012 1:42am Jul 25, 2012 1:42am
Sorry if it was not clear, with intervention I meant the SNB money to buy Forex to keep the CHF low.
  • #8,725
  • Jul 25, 2012 1:45am Jul 25, 2012 1:45am
Quoting didi_doedel
Sorry if it was not clear, with intervention I meant the SNB money to buy Forex to keep the CHF low.
Ahhhh right yes sorry I would think the SNB have been spending billions again this week
  • #8,726
  • Jul 25, 2012 2:24am Jul 25, 2012 2:24am
Quoting didi_doedel
I try to guess the SNB intervention of this week.

Just by looking at the EUR/CHF chart in combination with the news I guess that SNB intervention will be largest one we have seen so far.

Does anyone have a better crystal ball? E.g. info from Swiss banks?
I think no it will be below 15bln less than the amount beforeGreek elections.keep in mind, everyone lost who bought chf against any currency except EUR (with eur was ofcourse neutral result, but lost on the swap).maybe not very attractive ATM, good tactic from Jordan. Eg. Usdchf long was very good.
  • #8,727
  • Jul 25, 2012 3:59am Jul 25, 2012 3:59am
where are the members of the snb? from July 3 they have not said anything. What are you planning?
  • #8,728
  • Jul 25, 2012 4:53am Jul 25, 2012 4:53am
SNB's Jordan says sees no problem in the size of FX reserves, and the SNB could in theory have unlimited FX reserves
  • #8,729
  • Jul 25, 2012 5:27am Jul 25, 2012 5:27am
ZURICH--Swiss National Bank President Thomas Jordan said the increase in the central bank's currency reserves doesn't pose a problem given the uncertainties in the euro zone, according to a preview of an interview to be published Thursday with the weekly Die Weltwoche.

The SNB's currency reserve have risen to 365 billion Swiss francs ($368 billion) by the end of June, but Mr. Jordan said this wasn't a problem and in theory there is no limit to the size of such currency holdings, Mr. Jordan is cited as saying in the preview of the interview.

Mr. Jordan said that the SNB has accumulated the currency holdings in order to defend its policy of interevening on the foreign exchange markets to keep the euro above the CHF1.20 floor. The floor was imposed by the SNB in September to check global investor demand for the franc, seen as a shelter from the euro-zone debt crisis.

He added that there is a lack of clarity over the situation in the euro zone, Switzerland's biggest trade partner, and the European Union would seem to be reacting to short-term developments rather than taking a longer-term perspective.

Write to Neil MacLucas at [email protected]
  • #8,730
  • Jul 25, 2012 6:13am Jul 25, 2012 6:13am
confirmation:
http://online.wsj.com/article/BT-CO-...25-704107.html

together with an ESM banking licence discussions for me this means that puts become cheaper :-)
  • #8,731
  • Jul 25, 2012 6:32am Jul 25, 2012 6:32am
I dont think the SNB have any intention of bringing in capital controls or negative rates.

They seem happy just to keep defending the floor by increasing there fx reserves.
  • #8,732
  • Jul 25, 2012 4:49pm Jul 25, 2012 4:49pm
Hasn't anyone tried simply trading the range with a large lot size?

Could make hourly trades with this pair that way.
  • #8,733
  • Jul 25, 2012 8:21pm Jul 25, 2012 8:21pm
Quoting kibescorp
Hasn't anyone tried simply trading the range with a large lot size?

Could make hourly trades with this pair that way.
Even with the spread of 2 pips, I can't make anything much scalping the last 2 weeks!

I made more money though - from carry trade!
  • #8,734
  • Jul 25, 2012 9:13pm Jul 25, 2012 9:13pm
Quoting alaneth
Even with the spread of 2 pips, I can't make anything much scalping the last 2 weeks!

I made more money though - from carry trade!
Right, makes no real sense to trade for 1-2 pips, the broker probably just earns more than you get from the trade.
Just hold positions, cash in the rolls and wait for breakout, heading 1.22-25.
  • #8,735
  • Jul 25, 2012 10:06pm Jul 25, 2012 10:06pm
Quoting Napoleon180
Right, makes no real sense to trade for 1-2 pips, the broker probably just earns more than you get from the trade.
Just hold positions, cash in the rolls and wait for breakout, heading 1.22-25.
Is it a hope or forecast?
  • #8,736
  • Jul 26, 2012 3:14am Jul 26, 2012 3:14am
I dont know if anyone is interested in this pair or thread anymore but if someone with more knowledge than me could answer this.

wouldnt it be in everyones interest to try and open the trading range of this pair up a bit.

I know the SNB want stability but it would give them a chance to offload some euro at a better rate it would ease the pressure on the floor.
  • #8,737
  • Jul 26, 2012 3:26am Jul 26, 2012 3:26am
Quoting brinks
I dont know if anyone is interested in this pair or thread anymore but if someone with more knowledge than me could answer this.

wouldnt it be in everyones interest to try and open the trading range of this pair up a bit.

I know the SNB want stability but it would give them a chance to offload some euro at a better rate it would ease the pressure on the floor.
Open it up in what direction? Triggering long-stoploss orders below 1.1990 and make reputational damage? And on the upside i see no way of opening the trading range. Who should do that? retailers who are already long? too much selling pressure as long as EUR-"crisis" is not solved. So at the moment SNB seems to be happy with 1.2010 or 11! Speculators get pissed of EURCHF and thats what they want. BTW every other currency is getting stronger against CHF, so EURCHF at 1.20 is good for CH anyway.
  • #8,738
  • Jul 26, 2012 3:31am Jul 26, 2012 3:31am
Quoting Swissie
Open it up in what direction? Triggering long-stoploss orders below 1.1990 and make reputational damage? And on the upside i see no way of opening the trading range. Who should do that? retailers who are already long? too much selling pressure as long as EUR-"crisis" is not solved. So at the moment SNB seems to be happy with 1.2010 or 11! Speculators get pissed of EURCHF and thats what they want. BTW every other currency is getting stronger against CHF, so EURCHF at 1.20 is good for CH anyway.
Sorry yes i meant open the trading range long the SNB could slowly start creeping the range up stealthy like the jpy did.
  • #8,739
  • Jul 26, 2012 4:32am Jul 26, 2012 4:32am
My 2 cents:

For SNB in the medium term (-Sept):
They announce that they will keep 1,20, so they will do it in the medium term. Increasing officially above 1,20 would be very costly and has very little hope to scare the shorts, but may rather backfire. They might try to buy unofficially on good news for EUR to test the markets.

Before a decision is reached by the German courts and before the situation of Greece and Spain becomes clearer, there is however too much uncertainty that EUR/CHF may go up. This means that they have to intervene massively. Just by looking at the exchange rate, I bet it will be more than 15billion this week. At latest in Sept. the Swiss economy will officially leave deflation and the risks of a housing bubble will be discussed again. E.g. look at oil imports when USD/CHF rises, or the consequences of generating huge amounts of money.

Some measures might be taken like negative interest rates and making real estate investments more difficult for locals (lower leverage) and/or foreigners (lex Koller).


In long term (Oct-):
Depending on the outcome of all the items mentioned before, the SNB may re-consider their intervention: in particular they would have to balance risks (inflation, loss of money, endless intervention) against the benefits. The main risk is that their duty is to prevent inflation. What happens if they accumulate huge amounts and then inflation comes with the exchange rate still at 1,20? They might be forced to give up the 1,20 to prevent inflation/bubbles and realise big losses. If you look at Japan: the impact of a real estate crisis may be extremely long. So EUR may remain weak for very long, and a real estate bubble in Switzerland should be avoided at all costs.

Another item to consider by then are 2013 elections in Italy and Germany.

This is why I bet that one day they will have to give up their intervention.
  • #8,740
  • Jul 26, 2012 4:57am Jul 26, 2012 4:57am
Quoting didi_doedel
My 2 cents:

For SNB in the medium term (-Sept):
They announce that they will keep 1,20, so they will do it in the medium term. Increasing officially above 1,20 would be very costly and has very little hope to scare the shorts, but may rather backfire. They might try to buy unofficially on good news for EUR to test the markets.

Before a decision is reached by the German courts and before the situation of Greece and Spain becomes clearer, there is however too much uncertainty that EUR/CHF may go up. This means that they have to intervene massively....
So you think that they will be out of -1% deflation by october of this year
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