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EUR/CHF

  • #9,301
  • Aug 31, 2012 10:00am Aug 31, 2012 10:00am
"If developments in the international economy are worse than foreseen, or if the Swiss franc does not weaken further as expected, renewed downside risks for price stability could emerge," Jordan said. "Should the economic outlook and the threat of deflation require it, the SNB is prepared at any time to take further measures."
This is what Jordan said in April, with a bit of thinking we can see that downside risk will emerge: 1- if economy in EZ worsens, there will be a risk. 2- if it improves Euro gains and as well the CHF so CHF doesn't weaken. So in any way the SNB would have had problems with price stability and the data in recent months has proven the case. After 5 months Jordan comes with the word that "the peg is not forever and it was an extreme measure in an extreme condition." And literally I am confused and have no idea what he means.
Please help me out if you have any idea.
  • #9,302
  • Aug 31, 2012 10:01am Aug 31, 2012 10:01am
Quoting brinks
I dont know but i think Jordan should take some lessons from bernanke on how to talk a currency down.
During Hildebrand's time, there was a lot of possibly injected rumors about a repeg higher causing many upward spikes. Remember the good times last year when EURCHF went up to 1.24?

Seeing the persistently good Swiss economy, I think the pair will stay at 1.2010 till year's end and the peg will stay on.
  • #9,303
  • Aug 31, 2012 10:08am Aug 31, 2012 10:08am
@ Holmes and Aleneth

That's why I'm out of this pair haven't a clue whats going on and can't see it moving from the 1.20 level.

See what draghi brings out next week I think it will take a lot to reverse the inflows on this thing.
  • #9,304
  • Aug 31, 2012 10:13am Aug 31, 2012 10:13am
Quoting holmes
"If developments in the international economy are worse than foreseen, or if the Swiss franc does not weaken further as expected, renewed downside risks for price stability could emerge," Jordan said. "Should the economic outlook and the threat of deflation require it, the SNB is prepared at any time to take further measures."
This is what Jordan said in April, with a bit of thinking we can see that downside risk will emerge: 1- if economy in EZ worsens, there will be a risk. 2- if it improves Euro gains and as well the CHF so CHF doesn't...
From April until now, the new problem is hot cash inflows into Swiss due to EZ crisis.

I think when Jordan recently says "the peg is not forever", he was being questioned on whether SNB will stay put on 1.20 indefinitely. I think Joardan did not just utter those words unless he was questioned by the media or somebody.

Of course, if he is to look at long term (2-3yrs on), this measure (peg) cannot be prolonged as it will inflate the Swiss balance sheet. Jordan may still think that CHF will still eventually weaken over time and the need of the peg will then be unnecessary. This period may be in a year when the EZ economies improve and money starts to flow out of Swiss - I believe that is what Jordan thinks.
  • #9,305
  • Aug 31, 2012 10:20am Aug 31, 2012 10:20am
Quoting brinks
@ Holmes and Aleneth

That's why I'm out of this pair haven't a clue whats going on and can't see it moving from the 1.20 level.

See what draghi brings out next week I think it will take a lot to reverse the inflows on this thing.
I think before going out, isn't it better to just wait till Sept 14th's SNB Monetary Policy meeting?

Yes, I'm also halving my balance on this pair, but not my positions. What I'm doing is transferring some of my funds to stable brokers with super high leverage 1000:1, use max leverage and open max lots. There are some brokers out there with absolutely no negative spikes and has not gone below 1.2005 since Apr 4th. So the downside risk is very low, but the upside is all I can gain.
  • #9,306
  • Aug 31, 2012 10:40am Aug 31, 2012 10:40am
Quoting alaneth
I think before going out, isn't it better to just wait till Sept 14th's SNB Monetary Policy meeting?

Yes, I'm also halving my balance on this pair, but not my positions. What I'm doing is transferring some of my funds to stable brokers with super high leverage 1000:1, use max leverage and open max lots. There are some brokers out there with absolutely no negative spikes and has not gone below 1.2005 since Apr 4th. So the downside risk is very low, but the upside is all I can gain.

Another poor weekly close near 1.20050.

The SNB won't do anything at the next meeting and I don't think there will even be a 20 pip spike so wasn't worth holding the positions on one account positiv swap and one account negative.
  • #9,307
  • Aug 31, 2012 4:41pm Aug 31, 2012 4:41pm
maybe we have slovenia's exit before grexit.

regarding inflation in Switzerland: the salary increase requested by travail suisse is only 1% to 2%, so I admit that this will work against any possible inflation.
  • #9,308
  • Aug 31, 2012 6:28pm Aug 31, 2012 6:28pm
and now Japan is running out of money in a political game.

Kind of deja vu in US.
  • #9,309
  • Sep 1, 2012 10:55am Sep 1, 2012 10:55am
Quoting didi_doedel
maybe we have slovenia's exit before grexit.

regarding inflation in Switzerland: the salary increase requested by travail suisse is only 1% to 2%, so I admit that this will work against any possible inflation.
If it comes that far that Slovenia will ask for finacal help then that help will be a lot smaller than was help for Greece, Spain, Italy... So you don't need to worry about us. And your politicans are germany's ass lickers so exit is not the first option.
  • #9,310
  • Sep 2, 2012 3:25am Sep 2, 2012 3:25am
http://snbchf.com/2012/08/the-full-t...thomas-jordan/

I found this but guess most people have read it.

What happens if the ECB cuts rates this week more pressure on the floor?
  • #9,311
  • Sep 2, 2012 7:01am Sep 2, 2012 7:01am
Quoting brinks
http://snbchf.com/2012/08/the-full-t...thomas-jordan/

I found this but guess most people have read it.

What happens if the ECB cuts rates this week more pressure on the floor?
ECB won't cut rates for sure however if it happens there will be more pressure on the floor.
  • #9,312
  • Sep 2, 2012 7:04am Sep 2, 2012 7:04am
Quoting brinks
http://snbchf.com/2012/08/the-full-t...thomas-jordan/

I found this but guess most people have read it.

What happens if the ECB cuts rates this week more pressure on the floor?
Generally, what I understand from interview is that Jordan believes 1.2 is the all time low rate for EURCHF and that is why the government supports him.
  • #9,313
  • Sep 2, 2012 7:45am Sep 2, 2012 7:45am
The worst is Thomas Jordan doesn't say that swiss franc is overvalued. this interview is very artificial and I think we will have some surprise the next days.

Thomas Jordan didnīt go to Jackon Hole because there was a SNB bank council meeting on agoust 31. So I deduce they are preparing something important
  • #9,314
  • Sep 2, 2012 8:04am Sep 2, 2012 8:04am
Quoting alesss
The worst is Thomas Jordan doesn't say that swiss franc is overvalued. this interview is very artificial and I think we will have some surprise the next days.

Thomas Jordan didnīt go to Jackon Hole because there was a SNB bank council meeting on agoust 31. So I deduce they are preparing something important
By important i take it you mean a removal of the 1.20 floor?
  • #9,315
  • Sep 2, 2012 8:07am Sep 2, 2012 8:07am
Quoting brinks
By important i take it you mean a removal of the 1.20 floor?
Sure not, as he has confirmed it is out of question for now.
  • #9,316
  • Sep 2, 2012 8:11am Sep 2, 2012 8:11am
Quoting holmes
Sure not, as he has confirmed it is out of question for now.
I was just asking as i know alesss is bearish and thinks the floor is going to be dropped or removed.

I wondered if things he/she still thinks the same.
  • #9,317
  • Sep 2, 2012 8:32am Sep 2, 2012 8:32am
Quoting brinks
By important i take it you mean a removal of the 1.20 floor?
I don't know. It's possible change of the 1,20 floor. O maybe capital controls or negative interest rate. I don't know what but They have to do something because they are buying too much euros.
  • #9,318
  • Sep 2, 2012 8:39am Sep 2, 2012 8:39am
Quoting alesss
I don't know. It's possible change of the 1,20 floor. O maybe capital controls or negative interest rate. I don't know what but They have to do something because they are buying too much euros.
A change of the floor you think a lower floor towards 1.10?

I dont see them doing negative rates or capital controls
  • #9,319
  • Sep 2, 2012 8:48am Sep 2, 2012 8:48am
Quoting brinks
A change of the floor you think a lower floor towards 1.10?

I dont see them doing negative rates or capital controls
I don't know

But today there are seven times more of swiss francs than four year ago. Today there are 1000 tonnes of gold in Switzerland and 2000 tonnes ten years ago.

Is it normal all this? Or is it irrelevant?
  • #9,320
  • Sep 2, 2012 9:00am Sep 2, 2012 9:00am
Quoting alesss
I don't know

But today there are seven times more of swiss francs than four year ago. Today there are 1000 tonnes of gold in Switzerland and 2000 tonnes ten years ago.

Is it normal all this? Or is it irrelevant?
I really dont know.

It would be nice to be a fly on the wall in the SNB meetings
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