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Old 16.07.2011, 10:57
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Is Sterling heading for parity with CHF?

I have been observing the trend on XE.COM for last few months and as someone who gets paid in CHF and lives mainly in Switzerland and has mortgage and other costs in UK, I sometimes wonder how I should keep my savings after all costs are paid (well saving rates in Switzerland seem even poorer than in UK - I wonder if they have things like premium bonds or something more exciting than a savings account).

With BOE's refusal to hike interest rates despite their mission statement to keep inflation under 2% (it is 4% now), and SNB refusing to reduce interest rates despite the potential damage to Swiss exporters of an expensive currency, I wonder when the current trend would reverse course?

When I came here 3 months ago it was 1.4 CHF to a pound, now it is almost 1.3 which is a significant change in a short period, and knowing that it was about 2.4 before the current recession 3 years ago, I wonder if it is actually going to get worse for sterling before it gets better and may be we will see a 1:1 ratio in a year's time. Any thoughts?
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Old 16.07.2011, 11:17
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Re: Is Sterling heading for parity with CHF?

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I have been observing the trend on XE.COM for last few months and as someone who gets paid in CHF and lives mainly in Switzerland and has mortgage and other costs in UK, I sometimes wonder how I should keep my savings after all costs are paid (well saving rates in Switzerland seem even poorer than in UK - I wonder if they have things like premium bonds or something more exciting than a savings account).

With BOE's refusal to hike interest rates despite their mission statement to keep inflation under 2% (it is 4% now), and SNB refusing to reduce interest rates despite the potential damage to Swiss exporters of an expensive currency, I wonder when the current trend would reverse course?

When I came here 3 months ago it was 1.4 CHF to a pound, now it is almost 1.3 which is a significant change in a short period, and knowing that it was about 2.4 before the current recession 3 years ago, I wonder if it is actually going to get worse for sterling before it gets better and may be we will see a 1:1 ratio in a year's time. Any thoughts?
Purchasing power is nearer 2 to the , the CHF looks expensive to me based on value. Markets tend to overshoot, parity would be a huge buying oportunity IMHO, nothing is impossible.
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Old 16.07.2011, 11:18
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Re: Is Sterling heading for parity with CHF?

I'm afraid I'm a bit of a purist in this regard and figure that the market with all of its global opinions and inputs has already factored in all those things that are likely to happen.......so in my simple mind, its 50% likely to rise and 50% likely to fall from the current rate.

My own view would be that if most of your costs are in GBP, and if you feel like 1.3 is good value (as I do), then whack as much of your money as possible over there and at least you'll have the certainty....but then don't look back at the opportunity missed if it drops to 1.2 or beyond....easier said than done though
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Old 09.08.2011, 09:08
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Re: Is Sterling heading for parity with CHF?

1.25 CHF/GBP today and no sign of a trend reversal. We are getting that much closer to parity! Glad have kept savings in CHF.
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Old 09.08.2011, 09:11
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Re: Is Sterling heading for parity with CHF?

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When I came here 3 months ago it was 1.4 CHF to a pound, now it is almost 1.3 which is a significant change in a short period, and knowing that it was about 2.4 before the current recession 3 years ago, I wonder if it is actually going to get worse for sterling before it gets better and may be we will see a 1:1 ratio in a year's time. Any thoughts?
Thanks for reminding me how much money I lost in exchange rates... grumble grumble grumble
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Old 09.08.2011, 09:19
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Re: Is Sterling heading for parity with CHF?

I am in a similar position - but took the opposite view, and decided that 1.24CHF/ was too good a rate (from a historical perspective) to ignore - and transferred some money back to the UK today, with a view to paying off some of my mortgage. I read that SNB were planning new initiatives soon and figured just in case these had an impact I would move money today (although I realise in reality these probably have about as much chance as working for more than a few days, as their attempts last week).

I figured in any event, even if the franc gains further - I will still be earning in francs, so will still be winning - even if i didnt transfer funds at the best moment. Plus, in any event - the UK mortgage rates (although low) are far higher than the Swiss interest rates - so paying off mortgage makes sense for me.
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Old 09.08.2011, 09:22
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Re: Is Sterling heading for parity with CHF?

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Thanks for reminding me how much money I lost in exchange rates... grumble grumble grumble
You think you have a monopoly on that one?
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Old 09.08.2011, 09:35
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Re: Is Sterling heading for parity with CHF?

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You think you have a monopoly on that one?
No, but I am the most important; to me, anyway.
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Old 09.08.2011, 13:33
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Re: Is Sterling heading for parity with CHF?

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I am in a similar position - but took the opposite view, and decided that 1.24CHF/ was too good a rate (from a historical perspective) to ignore - and transferred some money back to the UK today, with a view to paying off some of my mortgage. I read that SNB were planning new initiatives soon and figured just in case these had an impact I would move money today (although I realise in reality these probably have about as much chance as working for more than a few days, as their attempts last week).

I figured in any event, even if the franc gains further - I will still be earning in francs, so will still be winning - even if i didnt transfer funds at the best moment. Plus, in any event - the UK mortgage rates (although low) are far higher than the Swiss interest rates - so paying off mortgage makes sense for me.
It has already dropped to 1.14 only a few hours after this post. I think the market has gone nutts!
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Old 09.08.2011, 13:37
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Re: Is Sterling heading for parity with CHF?

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It has already dropped to 1.14 only a few hours after this post. I think the market has gone nutts!
Sorry 1.21 my mistake or my browser's ..
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Old 09.08.2011, 15:57
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Re: Is Sterling heading for parity with CHF?

Yeah, looks like you were right Mr Happy. 1.20 now. Crazy. Did not expect a further 4% drop today alone. Oh well.

It was only a couple of weeks ago the Euro was at 1.20 francs - and now look where it is.
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Old 09.08.2011, 16:01
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Re: Is Sterling heading for parity with CHF?

swiss franc is really gone crazy.. well ought to be with Euro zone, US are in deep problems so the FII and others are coming towards the Swiss franc, autralian dollar , singapore dollar for investment and making the value jump so high. With Europ today it is 1.05 and this is in matter of 1 months from 1.23 or so.
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Old 09.08.2011, 16:12
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Re: Is Sterling heading for parity with CHF?

Surely the franc at these levels is unsustainable. I know Switzerland has low public debt etc but no way is 1 CHf = 1.20 GBP. Crazy!

I guess when growth eventually returns to the world economy this will all be a bit of a bubble.
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Old 09.08.2011, 16:17
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Re: Is Sterling heading for parity with CHF?

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I guess when growth eventually returns to the world economy this will all be a bit of a bubble.
In other words, once things "change", this will have been "different"?

Truly an amazin' insight offered us!
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Old 09.08.2011, 16:58
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Re: Is Sterling heading for parity with CHF?

I'd like to know what effect, if any, the riots in London will have on sterling...
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Old 09.08.2011, 17:01
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Re: Is Sterling heading for parity with CHF?

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I'd like to know what effect, if any, the riots in London will have on sterling...
Big boost for construction, plastic bullet and insurance industries
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Old 09.08.2011, 17:10
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Re: Is Sterling heading for parity with CHF?

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I'd like to know what effect, if any, the riots in London will have on sterling...
well if you're a keynesian, then you probably think the riots are great since it will create jobs to fix the windows, clean the streets and re-fit the burnt out shops.
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Old 09.08.2011, 17:23
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Re: Is Sterling heading for parity with CHF?

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well if you're a keynesian, then you probably think the riots are great since it will create jobs to fix the windows, clean the streets and re-fit the burnt out shops.
lol ..also means businesses would feel nervous to move or invest in London and whoever thought of ever investing in Tottenham, Peckham, etc will be heading the other way. Result: an even bigger riot in 10 years!
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Old 09.08.2011, 18:27
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Re: Is Sterling heading for parity with CHF?

GBPCHF 1.184.......What on Earth is going on!!! This cannot possibly happen so quick.

I am in a weird situation. Moving to Switzerland in September and I currently earn in USD. Is there a way to convert my money now to pay rent deposit? For every 0.5 change in CHFUSD I am losing like $500. The problem is that because I haven't moved yet I dont have a bank account. Going to any of the currency exchange places is just a rip off!
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Old 09.08.2011, 18:47
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Re: Is Sterling heading for parity with CHF?

I think your best bet in these volatile markets is not to use a deposit and apply for Swisscaution http://www.swisscaution.ch/en/home ... you'll pay an annual fee (which is probably less than $500), they'll pay your deposit and you can hold on to your dollars and invest them in something else to make up for the fee! You can do that once you get here, my understanding is that they are OK with lending to foreigners with limited history as well.
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