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Old 20.04.2011, 12:22
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CHF EUR parity. When will it happen?

What's your view?

Last edited by Phil_MCR; 18.07.2011 at 11:43.
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Old 20.04.2011, 13:08
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Re: CHF=EUR parity. When will it happen?

Soon, depends on if Spain goes tits up.

The more pressure that's put on to the USD and the EUR with bad debt the more people run to the Chf.

I posted some interesting stuff I found on the USD/CHF situation. It pretty much carries over to this discussion.

http://www.europe2020.org/spip.php?article690&lang=en

10 yr Chf vs Euro from the ECB paints the picture.

http://www.ecb.int/stats/exchange/eu...ph-chf.en.html
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Old 20.04.2011, 13:18
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Re: CHF=EUR parity. When will it happen?

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What's your view?
Too many factors to consider.

plus factors for CHF value
  • If the rumour is true that the SNB will up interest rates before mid-year
  • If people keeping buying CHF as a safe haven (because there are not enough CHF around to meet demand & will the SNB print more in order to swop them for currencies that are declining in value - I think not)
Negative factors for euro
  • If the Greeks keep rioting & force euro deal restructure
  • New Irish government force euro deal restructure
  • Spanish proporty market goes into free fall
  • Somebody audits Italy's numbers
  • Belgium continues with no Government
I would say end of 3Q if all worst cases occur.
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Old 20.04.2011, 13:48
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Re: CHF=EUR parity. When will it happen?

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Too many factors to consider.

plus factors for CHF value
  • If the rumour is true that the SNB will up interest rates before mid-year
  • If people keeping buying CHF as a safe haven (because there are not enough CHF around to meet demand & will the SNB print more in order to swop them for currencies that are declining in value - I think not)
Negative factors for euro
  • If the Greeks keep rioting & force euro deal restructure
  • New Irish government force euro deal restructure
  • Spanish proporty market goes into free fall
  • Somebody audits Italy's numbers
  • Belgium continues with no Government
I would say end of 3Q if all worst cases occur.
For me, I think it has been clear all along that Greece will either default ("restructure") and I suspect other countries could follow suit.

The SNB rate rise is an interesting one. SNB isn't really controlling inflation, but I wonder how long this can go on for? It would be a bit of an own goal to have bought all those EURs and then raise the rates.

My guess is that parity would be reached either on the initial Greek default or soon after on the subsequent financial aftershocks and events resulting from this.
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Old 20.04.2011, 14:27
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Re: CHF=EUR parity. When will it happen?

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For me, I think it has been clear all along that Greece will either default ("restructure") and I suspect other countries could follow suit.

The SNB rate rise is an interesting one. SNB isn't really controlling inflation, but I wonder how long this can go on for? It would be a bit of an own goal to have bought all those EURs and then raise the rates.

My guess is that parity would be reached either on the initial Greek default or soon after on the subsequent financial aftershocks and events resulting from this.
Quote:
About "The SNB rate rise is an interesting one.
The big Swiss banks are talking on this topic; whether it is a real forecast or they are just trying to push people from variable to fix rate mortgages would be a good debate.

Quote:
About Chf will have to decline in value or else the Swiss growth outlook will have to be lowered which will help decrease chf value in return.
This is a very logical view but I do not believe this market is following logic; if it was the CHF would not be so high today.

Quote:
About "The other question is if the SNB will try to intervene again"
My view is yes & with the same lack of success as last time. I do not think they are yet ready to accept the small SNB cannot compete successfully against the market forces driving the CHF up.
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Old 20.04.2011, 15:03
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Re: CHF=EUR parity. When will it happen?

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This is a very logical view but I do not believe this market is following logic; if it was the CHF would not be so high today.
Perfectly true, but remember that lower exports due to high CHF lead to a lower growth outlook thus triggering a chf sell-off.
It would be highly problematic if high demand for expensive Swiss goods continues...
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Old 20.04.2011, 15:31
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Re: CHF=EUR parity. When will it happen?

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Perfectly true, but remember that lower exports due to high CHF lead to a lower growth outlook thus triggering a chf sell-off.
It would be highly problematic if high demand for expensive Swiss goods continues...
Classic approach; but I am just not convinced people are buying the CHF based on CH growth forecast.
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Old 18.07.2011, 11:47
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Re: CHF=EUR parity. When will it happen?

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I would say end of 3Q if all worst cases occur.
might not hit parity by the end of Q3, but maybe by the end of the year.
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Old 18.07.2011, 12:52
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Re: CHF=EUR parity. When will it happen?

Based on my analysis the next strong support level is at 1.106 and that's as low as it will go in the short term.
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Old 18.07.2011, 14:35
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Re: CHF=EUR parity. When will it happen?

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Based on my analysis the next strong support level is at 1.106 and that's as low as it will go in the short term.
Short article in Business week on this topic
http://www.businessweek.com/news/201...ro-parity.html

One quote is "“The Swiss franc looks like it will go to par with the euro,” said John Taylor, founder of FX Concepts LLC in New York, the world’s largest currency hedge fund. "
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Old 18.07.2011, 15:12
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Re: CHF=EUR parity. When will it happen?

i can easily see parity by the end of 2012 and potentially as soon as 2Q 2012 (or sooner) depending on events.

but there's so much uncertainty it's going to be hard to pin a date on parity, if indeed parity is even reached.
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Old 18.07.2011, 15:38
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Re: CHF=EUR parity. When will it happen?

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Based on my analysis the next strong support level is at 1.106 and that's as low as it will go in the short term.
Care to share your analysis with us?
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Old 18.07.2011, 15:45
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Re: CHF=EUR parity. When will it happen?

I wonder how long it is before the multinationals consider the fact that headoffices in Switzerland are simply too expensive and move out? Maybe the central bank should reflect on the damage a strong currency can do?
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Old 08.08.2011, 20:21
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Re: CHF=EUR parity. When will it happen?

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Based on my analysis the next strong support level is at 1.106 and that's as low as it will go in the short term.


Thanks for playing. Next!
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Old 08.08.2011, 20:31
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Re: CHF=EUR parity. When will it happen?

I thought that it would take long time for the parity CHF=EUR, but the situation with the EU makes CHF stronger. Lets see how much money the swiss central bank prints to avoid the CHF=EUR parity
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Old 20.04.2011, 13:47
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Re: CHF=EUR parity. When will it happen?

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What's your view?
Parity is being way too optimistic!

The CHF will get hammered at some point in the future. Don't forget that it is overly overvalued thus causing difficulties for Swiss exporters.
Chf will have to decline in value or else the Swiss growth outlook will have to be lowered which will help decrease chf value in return.

2nd Possibility: Debt restructuring in Greece. This will send the Euro in a downward spiral, but still, I don't see parity! Perhaps the 1.10 € level.
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Old 20.04.2011, 13:51
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Re: CHF=EUR parity. When will it happen?

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Parity is being way too optimistic!

The CHF will get hammered at some point in the future. Don't forget that it is overly overvalued thus causing difficulties for Swiss exporters.
Chf will have to decline in value or else the Swiss growth outlook will have to be lowered which will help decrease chf value in return.

2nd Possibility: Debt restructuring in Greece. This will send the Euro in a downward spiral, but still, I don't see parity! Perhaps the 1.10 € level.
1.10 is a 12% fall from the 1.25 level.
1.00 is a 20% fall.

If it settles at a given level, I would expect it would dip below that level on the initial sell-off.

The other question is if the SNB will try to intervene again and how much money they will burn before capitulating.
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Old 20.04.2011, 14:04
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Re: CHF=EUR parity. When will it happen?

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1.10 is a 12% fall from the 1.25 level.
1.00 is a 20% fall.

If it settles at a given level, I would expect it would dip below that level on the initial sell-off.

The other question is if the SNB will try to intervene again and how much money they will burn before capitulating.
SNB is a very weak central bank imho when compared to ECB or the Fed.
Additionally, I don't see inflation as a big concern for the Swiss as opposed to their neighbours.
I do agree with you that on the initial sell-off it might hit parity but wouldn't stay at parity for long. With a Greek default, I see it at 1.10 €. The SNB will have to intervene or else it will cause them some serious problems.
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Old 20.04.2011, 16:04
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Re: CHF=EUR parity. When will it happen?

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What's your view?
Discuss. .
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Old 20.04.2011, 16:54
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Re: CHF=EUR parity. When will it happen?

So taking all above into account.....should I buy my house in Spain now or delay until Q3?
If Spain does announce problems (cf Ireland, Greece et al) what is the effect liokely to be on the Euro and the Spanish property market? I just cant get my head around all these variables
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