CHF (Swiss Franc)

CHF (Swiss Franc)

Postby winston » Thu May 22, 2008 1:47 pm

Swiss Franc Advances After Investor Confidence Improved in May By Agnes Lovasz

May 21 (Bloomberg) -- The Swiss franc rose to the highest level in almost a month against the dollar after an industry report showed investor confidence in the economy improved in May amid signs financial-market tensions may be easing.

The franc was also near the highest level in a week versus the euro on signs the Swiss economy is holding up amid a global slowdown following the collapse of the U.S. subprime-mortgage market. The figures stoked speculation the Swiss National Bank has no scope to cut borrowing costs this year.

``The domestic economy isn't deteriorating sharply and activity figures continue to come in at reasonable levels,'' said Henrik Gullberg, a currency strategist in London at Calyon, the investment-banking arm of Credit Agricole SA. ``The SNB will have to adopt a slightly more hawkish stance and that should be supportive of the franc.''

Against the dollar, the franc rose as much as 1 percent, to 1.0277, the strongest since April 24, and was at 1.0316 by 4:27 p.m. in Zurich, from 1.0376 yesterday. The franc rose to parity with the U.S. currency for the first time on March 14. It was little changed at 1.6242 per euro.

An index of investors' and analysts' expectations for Switzerland's economy in the next six months rose to minus 60.4, from minus 71.4 the previous month, the ZEW Center for European Economic Research and Credit Suisse Group said today.

A government report yesterday showed inflation pressures increased in April. Producer and import prices rose 0.7 percent from March, when they climbed 0.6 percent, the report showed, compared with a 0.5 percent increase forecast by economists in a Bloomberg survey.

Reduced Bets

SNB Vice President Philipp Hildebrand said May 19 that credit markets are now in the ``second half'' of the crisis sparked by turmoil in the U.S. mortgage market.

Traders reduced bets the central bank will lower borrowing costs this year, futures prices show. The implied yield on the three-month Swiss franc interest-rate futures contract due September was little changed at 2.87 percent, the highest this month.

The Zurich-based SNB left its target rate at a six-year high of 2.75 percent in March as it focused on the threat of inflation. Policy makers next meet June 19 in Geneva.

Swiss borrowing costs are the third-lowest in the industrialized world, and compare with 0.5 percent in Japan and 4 percent for the 15 economies using the euro. The U.K.'s 5 percent main rate is the highest among the Group of Seven nations, while South Africa's benchmark is 11.5 percent.

The country's government bonds fell, with the yield on the 3 percent note due January 2018 climbing 3 basis points to 3.03 percent. Yields move inversely to bond prices.

Source: Bloomberg
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Re: Swiss Franc

Postby winston » Sun Jun 29, 2008 6:53 pm

Financial Times: Swiss franc may experience pressure

“Supporters popping into Switzerland for the Euro 2008 soccer tournament over the past few weeks might have got their timing just right.

“If the matches had been played a few months earlier, in March, when the financial world was embroiled in the turmoil emanating from Wall Street, foreign fans would have had to pay more for the trip.

“The brief jump in the Swissie during that period – from about SFr1.62 to the euro to SFr1.55 – confirmed that the franc remains a safe-haven asset.

“It’s now back to the former level but where it goes from here may provide a useful tool for gauging investors’ appetite for risk and the likely path for global markets.

“For John Hardy at Saxo Bank, the infatuation of central banks with inflation risks will damage global growth, benefiting the franc and the yen as investors from those countries repatriate funds to escape falling markets.

“The Swissie may also garner support from homeowners in eastern and central Europe. Having financed their mortgages in francs, these retail carry traders will face the prospect of house price deflation spreading from the US and UK and their domestic currencies falling, forcing them to buy francs to hedge exchange-rate risk.

“But other factors may reduce the franc’s attractiveness.

“The Swiss National Bank last week kept interest rates on hold at 2.75% and analysts are divided on the next move. True, producer price inflation is close to a 20-year high, but gross domestic product grew by just 0.3% in the first quarter so another cut in interest rates may be required.

“Yet perhaps the biggest drag could come from investors’ concerns about the Swiss financial sector, which accounts for 13% of national output. Indeed, the total assets of UBS and Credit Suisse are about seven times Swiss GDP.

“Safe havens are not always what they’re cracked up to be.”

Source: Jamie Chisholm, Financial Times, June 24, 2008.
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Re: Swiss Franc

Postby winston » Fri May 21, 2010 6:26 am

Pan-European Bank Run Is Now On: Capital Flight From UK To Switzerland, As GBPCHF Intervention Strikes by Tyler Durden on 05/20/2010 08:49 -0500

Yesterday we disclosed that the reason for numerous SNB interventions in the EURCHF was due to billions in deposits rushing out of Germany and seeking the relative stability of Swiss neutrality.

A quick look at the trading pattern of the GBPCHF shows that it is now UK depositors who are panicking and shifting their money to unnamed (not so much anymore) Zurich bank vaults.

The result: a 300 pip move in the GBPCHF as the SNB rushes to put out this particular capital flight fire. Too bad it only succeeded for about 12 hours. The run on the bank (to another bank) in Europe is now on.

http://www.zerohedge.com/article/pan-eu ... rikes-next
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Re: CHF

Postby winston » Thu Jun 02, 2011 8:23 am

Swiss Franc: Is It Really A Safe Haven? by Adrian Ash

Investors might be forgiven for thinking so, given some of the hawkish comments flying around.

"The Swiss National Bank's hands are tied," reckons one forex trader interviewed by the Wall Street Journal. "They were heavily criticized for their [2010] interventions and so fresh interventions are very unlikely."

So that's that, then. There's to be no repeat of Berne creating Swiss francs and dumping them into the currency market. No more Swiss quantitative easing.

Well, not unless "the situation in the currency markets leads to deflationary risks," as SNB deputy-chief Thomas Jordan assured Swiss radio listeners recently. "Monetary policy must always respond to the inflation outlook," he repeated on Swiss TV's Eco show later the same day.

"If inflation risks are on the rise, we will have to raise interest rates more quickly," Jordan added. (That sloshing noise you can hear is yield-starved investors salivating the world over.) But "if the situation is such that inflation risks are low, then interest rates can stay low relatively long."

"Monetary policy rates will have to rise gradually from 2011 onwards to damp inflationary pressures from domestic demand growth," said the OECD, "but most importantly [wait for it...] to avoid overheating in the housing market." Hildebrand himself warned in April of "imbalances with serious repercussions" if interest rates stay at a "very low level for a long time." The month before, the SNB said real-estate prices deserved their "full attention".

Even the government has hinted that a rising Swiss franc might not warrant quantitative easing, Swiss-style, part deux. The SNB's forex intervention of spring 2009 to summer 2010 quadrupled the central bank's balance-sheet to $207 billion. (That includes the outright loss of $15 billion on selling the rising Swiss franc to buy a falling euro.)

But economy minister Johann Schneider-Ammann told business leaders at the recent Swiss Economic Forum in Interlaken that, "The strong franc is creating many concerns, but we have to learn to live with it, want to live with it."

Amid such talk of higher rates and a strong Swiss franc, one could easily forget that rates are still sitting at 0.25% per year. And Swiss savers might not even get to 0.50% if the nation's exporters get their way.

Total Swiss exports rose almost 10% in the first quarter from the same period last year. Machinery and electrical engineering sales leapt by 27%. But "many companies have already started to implement measures against the strong Franc," warns industry-group Swissmem's spokesman Ivo Zimmermann. "The renewed rise could prompt some companies to cut jobs or move investments out of Switzerland."

Switzerland's export boost will be taken as proof that soft money works... just as policy-makers in Italy, Spain, Portugal and Greece kept repeating throughout the 1970s, and then kept practicing for 20 years after.

Euro accession put a stop to that behavior (why do you think Britain kept the pound well out of monetary union?) but even the European Central Bank in Frankfurt must see the 21st century spin on the devaluation trick: If you want to roar back out of recession, make sure your money is soft.

The US and Japan – both stuck at zero interest rates – show little sign of relinquishing the dubious honor of World's Softest Money. The equivocal, baby step rhetoric of the SNB – together with Swiss exporters' reluctance to give up the benefits of a weaker Swiss franc – suggest that we shouldn't expect Switzerland either to race away from the bottom just yet.

http://resourceinvestor.com/News/2011/5 ... Haven.aspx
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Re: CHF

Postby winston » Tue Sep 06, 2011 5:00 pm

Swiss National Bank Pledges Unlimited Currency Purchases to Weaken Franc

The Swiss central bank said it’s imposing a ceiling to the franc’s exchange rate for the first time in more than three decades and will defend the target with the “utmost determination” if needed.

http://www.bloomberg.com/news/2011-09-0 ... -euro.html
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Re: CHF

Postby winston » Wed Sep 07, 2011 8:13 am

Carry trade using CHF

“With immediate effect” by Simon Black

Here’s a practical example you can do– open a FOREX trading account and borrow Swiss francs at 0.5%.

Buy the EURCHF cross and simply hold euro cash, paying 0.65%.

At 100:1 leverage (quite common in FOREX trading), that translates into a 15% return simply for HOLDING CASH with no downside currency risk.

http://www.sovereignman.com/expat/with- ... ?a_aid=CRX
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Re: CHF

Postby kennynah » Thu Sep 29, 2011 7:33 pm

usd/chf went parabolically up in the last 6 weeks :shock:

from aug8 low of 0.7062 to current 0.8959

what's more interesting is the candles formation... have a look...there maybe a long term trade here...
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Re: CHF

Postby winston » Wed Oct 19, 2011 7:57 pm

Switzerland Has Lost It… Where's the Next Safe Haven?
By Dr. Steve Sjuggerud
Wednesday, October 19, 2011


"Switzerland has lost it – it's no longer the safe haven it once was," asset manager Adrian Day said over dinner Friday night in Dallas.

"The new Switzerland might just turn out to be China."

The idea sounded crazy – at first.

Switzerland has a longstanding reputation of being a safe haven… staying "neutral" in war, respecting privacy rights, and maintaining the world's strongest currency.

But the guys at the table understood what Adrian meant right away…

"I'm flying from here to Hong Kong," Michael Checkan responded to Adrian. Michael is a precious metals dealer. "We're looking at setting up a precious metals storage facility outside the U.S. and in Hong Kong."

"My plane just arrived from Hong Kong earlier today," Geoff Anandappa of Stanley Gibbons, a collectibles firm, chimed in. "We're opening up an office there."

Switzerland has now lost its credibility with this crowd…

As I said, Switzerland's currency used to be considered the world's strongest, with a significant gold backing. But Switzerland has been selling its gold.

And worse, Switzerland recently promised to print as much money as necessary to keep the Swiss franc from getting stronger versus the euro.

The Swiss are purposely weakening their currency. That's a big change from the Switzerland of old. Take a look:

Switzerland has had a longstanding reputation as a safe haven for your assets, away from intrusive governments. Swiss banks (and their vaults) are stuff of legend.

But in recent years, the famous Swiss banks have repeatedly broken their privacy promises, bowing to demands from the U.S. government.

So Adrian Day is right – Switzerland has lost it. It's no longer what it was.

But where is the safe haven of the future?

"China is the last place on earth that will stand up to the U.S.," Adrian said. "The last place that won't bow to U.S. demands."

I hadn't thought of Hong Kong as a safe haven like Switzerland before… But I need to change my thinking.

The U.S. and Europe have held many "monopolies" in world finance for nearly a century. But times are changing.

The West (namely Europe and the U.S.) is struggling under huge debt loads and entitlement promises that can never be fulfilled. Meanwhile, the East is rising.

It used to be that if the U.S. sneezed, the rest of the world would catch a cold. But that's not true anymore. Countries like India and China can keep growing without relying too much on the U.S. to buy their goods.

The world is not the same place it was even a few years ago. The incredible changes we've seen in Switzerland in just these few short years are a perfect example of the changes in the West. And you already know the incredible growth stories of the East.

I hadn't thought of it before… but China (through Hong Kong) may become the next Switzerland – the next safe haven.

As you consider where to invest your retirement or where to open an international bank account, keep this little story in mind.


Source: Daily Wealth
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Re: CHF

Postby winston » Wed Jan 11, 2012 9:33 am

Not vested

On Fast Money, CNBC:-

Shifting to the currency trade, Amelia Bordeau, a director for Westpac Institutionl Bank, said she was short the Swiss franc , as a result of the uncertainty created from the resignation of Phillip Hildebrand, the chairman of the Swiss National Bank.

She said would short the Swiss franc against a commodity currency.

Source: The Street
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Re: CHF

Postby winston » Thu Aug 16, 2012 8:10 pm

The Swiss franc is the worst-performing major currency over the past year… down 20% since "pegging" to the troubled euro last summer.
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