Looking for a bottom to add to longs? I'd wait for around 1.2010.
Ignored
I think from SNB's point of view it wouldn't be so wise to wait 1,2010 because there would be too many longs to jump in an jump out later
my two 2 cents - who knows
And if we had again -0.1% next month, YoY PPI would be +1.3% ...
And imagine for one second that SNB would really raise the floor now to 1.25. Then import prices would rise and PPI inflation would be even higher, which would cause the SNB to admit end of deflation and end of floor. So you can't have the cake and eat it too.
That's why SNB will not go this way and will defend only 1,2010.
The current rate is a market price under the assumption that SNB defends this. As long as SNB's credibility is intact, you should not expect that it goes down to 1,2010.
Now what? While there aren't a lot of people playing this patience game, E.Z hasn't solved the debt crisis and is not believed to sort it out in several years, JPY as a safe haven is losing ground after GDP figures and is thought to enter recession period, America at the edge of fiscal cliff and USD is too uncertain to be a haven, besides the SNB is saying is ready to act. Bottom will be an opportunity for retailers to pile orders in addition 30-40 pips higher than peg doesn't change the game and many investors will hide in Switzerland. Jordan believes [email protected] is highly valued and CPI 2 percent won't be reachable this way. Price stability and Stemming economy are main duties of theirs however recessionary figures around this country is endangering economy and price stability is not in range. How they are going to sort the problematic conditions is a mystery to me and I assume to the SNB as well, however as a trader adding some longs at this low price seems sensible.
I'm short , very strongest short!! Maybe i make $20 000!
good luck!
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There might be doubt if 1.2030 holds but the peg will stay for sure, so if u'r short take definite care and remember this pair moves are tough and rapid and you will need guaranteed sl to sleep tight at night.
I'll start to open long from 1.2020. I believe the pair will soon be back down to 1.2010 levels given Greece's problems, even if the bailout package goes thru.
Then we have Spain to watch. Well, when any member state of EZ is in trouble, all hell breaks loose & the reaction causes those nervous investors (or savers) to dump their money in safe havens - Swiss.
OK, talking of the 'fiscal cliff', if the US economy is 'pushed' off this cliff, I bet we will also see some US funds going into Switzerland.
Eventually EURCHF will drop to 1.2010 due to all these fiscal problems, but when is a question. Better be before Dec 13th SNB. 1 month to go.
hi, Jordan an hour later:
cap 1.2 was a right policy.
Economy of E.Z is still very vulnerable.
Eur/Chf at 1.2-1.21 is highly overvalued.
Monetary policy can not be successful alone and if not precisely taken into account may evaporate in case of export.
Switzerland economy is at risk in late 2012 and early 2013.
the SNB is ready to act in case.
hi, Jordan an hour later:
cap 1.2 was a right policy.
Economy of E.Z is still very vulnerable.
Eur/Chf at 1.2-1.21 is highly overvalued.
Monetary policy can not be successful alone and if not precisely taken into account may evaporate in case of export.
Switzerland economy is at risk in late 2012 and early 2013.
the SNB is ready to act in case.
Ignored
(MORE TO FOLLOW) Dow Jones Newswires
November 16, 2012 02:30 ET (07:30 GMT)
* DJ SNB Jordan: Fiscal Problems Abroad May Lead to Safe-Haven Inflows
(MORE TO FOLLOW) Dow Jones Newswires
November 16, 2012 02:30 ET (07:30 GMT)
DJ SNB Jordan: Franc Still Highly Valued, Burdens Economy
ZURICH (Dow Jones)--The Swiss franc is still highly valued and a burden for the Swiss economy, central bank chairman Thomas Jordan said Friday.
"The reasons that led us to the implementation of a minimum exchange rate are still in place," Mr. Jordan told bankers attending an industry conference in Zurich.
The SNB introduced a minimum exchange rate of 1.20 Swiss francs per euro on Sept. 6, 2011, after the Swiss currency had risen to unprecedented highs against the dollar and the euro in August.
The central bank has since frequently been selling francs against foreign currency to enforce the minimum exchange rate to ward off inflation and help exporters.
"The fiscal problems of many countries remain a source of potential safe-haven inflows, while the franc is still highly valued at the current rate and a burden for the economy," Mr. Jordan said.
That's why the SNB at its most recent policy meeting in September, that it plans to defend the minimum exchange rate with utmost determination, Mr. Jordan added.
That's why the SNB at its most recent policy meeting in September, that it plans to defend the minimum exchange rate with utmost determination, Mr. Jordan added.
Ignored
Utmost determination again, huh?.....
There's a confirmed recession going on here in EZ.
I think this peg will last for a long long time until EZ recovers in, say, 3 yrs time?
Looking at the stellar trade balance, I would not dare to say that the rate is a burden to the economy.
You find the balance in the calendar, then see what happened in the last ten years.
Rather the SNB intervention is a burden for other countries such as Italy.
Everyone is frustrated from this pair and there are no comments even to entertain,besides all speculative trading this pair helped me study economy of a developed country for more than a year and was really helpful especially following papers from the SNB, what I see from JPY tells me any haven breaks a day maybe more than believing any peg breaks a day. I strongly agree with Jordan that highly valued CHF is a burden to Switzerland economy, since Switzerland is a very small country compared with Global markets, the SNB needs to play a big role with pricing and if doesn't succeed, as it seems, the threat will be huge and when happened substantial. Eur/Chf at 1.2 is very difficult for marketing and regarding E.Z recession there will be a threat of loosing a 500 mil area on the neighborhood. In addition monetary easing from the SNB is not a risk for others as Italy it can be easily figured out if you see the volume of import and exports in Swiss.
Very good TP:SL ratio.