The next few months has gone and it's still at 1.20
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Please note, my advice isn't recommended and I myself risking that EUR may go up to 1.25. For future days to come, I will start to hedge on EUR/CHF. 1.20 will break somewhere around mid September and I don't want to be in a mess if something dramatic happens to Germany and the Euro... or vice-versa!
1.10 - 1.15 DOWNTREND... and this happened last year and 1 week later shot up to 1.20 and someone got very, very rich in just 1 week.
Please note, my advice isn't recommended and I myself risking that EUR may go up to 1.25. For future days to come, I will start to hedge on EUR/CHF. 1.20 will break somewhere around mid September and I don't want to be in a mess if something dramatic happens to Germany and the Euro... or vice-versa!
1.10 - 1.15 DOWNTREND... and this happened last year and 1 week later shot up to 1.20 and someone got very, very rich in just 1 week.
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So your buying eur/chf looking for 1.25 but expect the floor of 1.20 to break mid September time?
1) I have been thinking about opening an ECN account with FinFX (low spread and neutral swap for eur/chf longs), but it seems that ECN involves a considerable risk of slippage. In our worst case scenario (break of peg and significant spike down, even very short term) this could leave any trader with enormous debt, no? I therefore am not sure whether ECN is a reasoable account category for EUR/CHF Longs in the current context.
2) While we are all waiting for EUR/CHF to rise, what are your strategies to avoid being worn out by negative swaps or increased margin requirements? What is the ideal broker / account type for "our" trade?
1) I have been thinking about opening an ECN account with FinFX (low spread and neutral swap for eur/chf longs), but it seems that ECN involves a considerable risk of slippage. In our worst case scenario (break of peg and significant spike down, even very short term) this could leave any trader with enormous debt, no? I therefore am not sure whether ECN is a reasoable account category for EUR/CHF Longs in the current context.
2) While we are all waiting for EUR/CHF to rise, what are your strategies to avoid being...
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Hi Bluedolphin,
1) I find that ECN accounts have a very tight spread and you can place orders within the spread at specific prices. If the peg breaks and your account has negative balance protection, then your account will be wiped out but you won't be in debt. Check your brokers terms and conditions.
2) Pick a broker that has at least a small positive swap (many do) and some even have much higher swap levels. I know that IG Markets about 1 or 2 months ago increased the margin level for eurchf to about 1% (i think). They also pay negative swap. I use at the moment GoMarkets Pro & Standard accounts that pay $0.15 per 100,000 and exness mini and ecn accounts that pay $1.78 per 100,000. But take a look around.
Was the market testing the SNB this morning i have a low of 1.20045
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Many brokers are having deep down-spikes nowadays - illiquid times. Quite common, so to be safe, I think at least 10pips below the floor shall be our stop loss. 20 pips the better.
AVA now having these negative spikes too, besides negative swap - not good anymore.
It's better to have ECN accounts with the market being uncertain at illiquid times.
Stability is the main factor now in longing this pair.
the best is close every positions and wait until snb meeting on september. Maybe we have some new news about capital controls or negative interest rate on september.
the best is close every positions and wait until snb meeting on september. Maybe we have some new news about capital controls or negative interest rate on september.
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If the pressure on the floor is easing why would the SNB bring in capital control or negative rates?
The members of SNB say that CHF is overvalued and they can devalue it but they dont know how do it. Capital controls and negative interest rates are a posibility.
If there is a QE in USA and if BCE buy bonds of south countries, the CHF will not have pressure, so SNB can rise the floor. So we have to see what happen on September
The members of SNB say that CHF is overvalued and they can devalue it but they dont know how do it. Capital controls and negative interest rates are a posibility.
If there is a QE in USA and if BCE buy bonds of south countries, the CHF will not have pressure, so SNB can rise the floor. So we have to see what happen on September
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I hope your right but i really cant see them doing anything other than sitting tight and defending the 1.20 floor.
By Pete Jackson || August 20, 2012 at 11:00 GMT || 0 comments || Add comment
I don’t think so, but then who knows the real answer on this one…..
[url="http://seekingalpha.com/article/816681-is-the-snb-going-to-unpeg-the-eur-chf"][color=#2255aa]‘Seeking...
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I doubt that the SNB would unpeg the euro (or rather remove the floor). Remember that they want to protect their currency from becoming too expensive to help their exports. I think that is the bottom line for them. If they remove the floor, people will rush into the CHF (the safe haven) and the Swiss are back to square 1.
Home loans have increased by almost 300 billion CHF in a decade and gained 5.2 percent last year to 797.8 billion francs. That’s about 140 percent of Swiss gross domestic product.
Recent interventions in the forex market have seen the SNB’s balance sheet expand to record levels. Forex reserves have risen 71 per cent of GDP.
Danger 1: Inflation
SNB's primary role is to prevent high inflation.
However, housing prices went up a lot in the past years, but rent prices did not yet increase that much. This might come soon.
Oil and gas are just reaching all time highs in Germany, so with a fixed exchange rate this will be similar in Switzerland.
In the US, there is a big crop shortfall.
CHF lost a lot compared to all currencies except EUR.
EZ risks:
Grexit, Spain and Italy looking for the bailout funds. How can SNB face a long and strong EZ crisis?
Housing bubble risks:
Taxation of rich people by the socialist government in France and EZ crisis are pushing people to buy in a secure haven. In Switzerland there is an Italian and a French speaking part. The Swiss population is growing fast by immigration.
DJ Swiss 2011 Current Account Surplus Narrows On Financial Fees
16-Aug-2012
ZURICH--Switzerland's current account surplus narrowed last year as weaker income from financial investments, particularly abroad, outweighed ongoing robust export flows, driven largely by luxury goods and watches, Swiss National Bank data released Thursday showed.
The Swiss current account surplus contracted to 61.5 billion Swiss francs ($63.3 billion) in 2011, from CHF81.7 billion a year earlier, the SNB said.
The current account is the difference between a country's total exports and imports of goods, services and transfers, excluding transactions in financial assets and liabilities.
While sluggish euro-zone growth and the strength of the franc--which prompted the SNB to impose a floor of CHF1.20 per euro in September--helped push exports of Swiss chemicals down by 2%, sales of watches and jewelry surged 12%, driven by robust demand in emerging markets, and Asia in particular.
The receipts surplus from investment income fell by around CHF17 billion from a year earlier to CHF32 billion "as banks' interest business continued to fall, owing to lower interest rates and capital holdings," the SNB said.
The Alpine country's current account surplus as a percentage of gross domestic product slipped to 11% in 2011, from 15% a year earlier, the central bank said.
According to data from The Economist, Switzerland's current account/GDP surplus was at 13% in the first quarter of the year, compared with 5.4% in Germany, and 0.2% in the euro-area, its largest trading partner.
Do you have these spikes almost every day? Live account IBFX.
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Yes - nowadays these downward spikes seems to be very common, even on good stable platforms & even in ECN accounts! But ECN are more stable but still prone to these spikes. Many brokers have some sort of spike nowadays compared to previously.
The image below is a minute chart. Anybody knows why these low liquidity spikes must happen over a period of a few minutes every late NY afternoon / early Asian time?
I guess this might worth a look.
The SNB is diversifying their EUR reserves into AUD in last few months stated by the RBA.
Meaning is SNB unloading their EUR reserves already?
Correct me if i'm wrong
