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Old 16.01.2013, 23:20
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EURO growth versus CHF

I know nobody knows the future but I got a bit scared in the last
few days with a large and abrupt increase of the Euro versus the CHF.
We are currently doing some investment in France...
Do you think this is going to continue in such steep increase?
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Old 17.01.2013, 00:26
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Re: EURO growth versus CHF

The fair value is still far away, around 1.35... So yes, there is still room for recovery. But even disregarding that, purchasing real estate in France is quite a risk nowadays - have you thought of the impact on the market it will have when as of next year, 90% of frontaliers will be forced to pay french social insurance at rates between 8-13.5 percent of their salary, at the same time losing their swiss medical coverage? (All this discussed elsewhere in this forum) - I know a number of families looking forward to move back to CH from the french Pays de Gex..
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Old 17.01.2013, 01:38
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Re: EURO growth versus CHF

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I know nobody knows the future but I got a bit scared in the last
few days with a large and abrupt increase of the Euro versus the CHF.
...
This is exaggerated so far.


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...
We are currently doing some investment in France...
Do you think this is going to continue in such steep increase?
Apart that I'm too stupid to understand why that would be a disadvantage when the Euro rises again ...

Well, being Swiss economy heavily overestimated (more power to good Swiss PR and very naive foreigners, however), I think 1.35 is far from being a realistic exchange rate. 1.60 or more, as it used to be for years, is more likely to come back, and it will. The only question is until when, not if.

P.S. Did you really think that the actual rate was forever and that hyper-careful SNB would have run a policy like the one witnessed spending 2.000.000.000 franks a day for nothing?
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Old 17.01.2013, 08:16
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Re: EURO growth versus CHF

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I know nobody knows the future but I got a bit scared in the last
few days with a large and abrupt increase of the Euro versus the CHF.
We are currently doing some investment in France...
Do you think this is going to continue in such steep increase?
Are you aware of the capital gains tax on property sales in France??
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Old 17.01.2013, 08:26
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Re: EURO growth versus CHF

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Do you think this is going to continue in such steep increase?
I certainly hope so.

Tom
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Old 17.01.2013, 16:23
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Re: EURO growth versus CHF

thanks to all replies...
1.30 1.60, capital gains tax, social security... life is complicated!
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Old 17.01.2013, 16:39
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Re: EURO growth versus CHF

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I know nobody knows the future but I got a bit scared in the last
few days with a large and abrupt increase of the Euro versus the CHF.
We are currently doing some investment in France...
Do you think this is going to continue in such steep increase?

I assume you are investing in euro & you are buying the euro with CHF? So if the euro rises versus the CHF & you sell your investment then you will get more CHF than you started with. So why be scared?

Or are you buying a property in France with a euro mortgage & are concerned the future repayments in euro will cost more in CHF?

If you are buying a property then please do not call it an investment (unless you plan to rent it out); properties are for living in
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Old 17.01.2013, 17:44
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Re: EURO growth versus CHF

Well most folks here are paid in swiss francs, and don't do speculative property shopping or investing in wrong items at wrong time. So strong swiss franc is actually very welcomed. 1.20 vs 1.25 doesn't change much in real life, 1.35 would be felt slightly and that 1.6 would be nasty.
There was a reason for strong franc rise, and I didn't see that reason disappear.
That is the voice from (mostly) silent crowd
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Old 17.01.2013, 17:50
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Re: EURO growth versus CHF

As I am getting paid in CH and doing international investments, I find it very profitable current strength of S.Fr. and hope only for better. Other than that, with such low inflation rate in Switzerland last five years I have been here for wouldn't make discernible difference in cost of living
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Old 17.01.2013, 18:40
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Re: EURO growth versus CHF

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Well most folks here are paid in swiss francs, and don't do speculative property shopping or investing in wrong items at wrong time. So strong swiss franc is actually very welcomed. 1.20 vs 1.25 doesn't change much in real life, 1.35 would be felt slightly and that 1.6 would be nasty.
There was a reason for strong franc rise, and I didn't see that reason disappear.
That is the voice from (mostly) silent crowd
Strong Swiss franc makes Switzerland more expensive in international trade and therefore puts local jobs at risk. Since most folks don`t do a lot out of the country they don`t directly see a benefit other than possibly cheap holidays.

But for the good of the Swiss economy and to keep jobs a weaker franc would certainly help exporters and the tourism industries to name 2.

Last edited by BrianJW; 17.01.2013 at 18:55. Reason: spelling correction
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Old 17.01.2013, 18:42
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Re: EURO growth versus CHF

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Or are you buying a property in France with a euro mortgage & are concerned the future repayments in euro will cost more in CHF?
It'll catch up eventually, but in the meantime some of us have been enjoying making our mortgage payments in Swiss Francs over the last two or three years... happy if it stays low (the euros, that is) for a few more years, but as it was around 1.6 when I took out the mortgage I won't be too disappointed when it regains those levels.
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Old 21.01.2013, 14:50
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Re: EURO growth versus CHF

what are the short term prospects for the exchange rate? will it be much above 1.2 in 6 months time? I had expected the rate to stay at 1.2 until the euro crisis is sorted out. Cyprus will very soon need a bail out so I'm surprised at last week's euro recovery.
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Old 21.01.2013, 14:52
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Re: EURO growth versus CHF

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If you are buying a property then please do not call it an investment (unless you plan to rent it out); properties are for living in
very true, but so many house buyers don't understand this
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Old 21.01.2013, 15:00
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very true, but so many house buyers don't understand this
Can't it be both?
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Old 21.01.2013, 15:06
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Re: EURO growth versus CHF

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Can't it be both?
course it can, you shouldnt buy a property without thinking what will happen when you sell
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Old 21.01.2013, 23:43
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Re: EURO growth versus CHF

Those buying real state in France can hedge their loans at a fixed EURCHF rate. That way the rate applied won't change no matter the actual exchange rate.
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Old 22.01.2013, 00:03
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Re: EURO growth versus CHF

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Those buying real state in France can hedge their loans at a fixed EURCHF rate. That way the rate applied won't change no matter the actual exchange rate.
That can be very expensive indeed, do you realise the implications of potential loss?
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Old 22.01.2013, 11:21
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Re: EURO growth versus CHF

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course it can, you shouldnt buy a property without thinking what will happen when you sell
True but that does not make it an investment.

When you sell your property you still need somewhere to live. If your property, for example, doubles in price then probably so have all the other properties in the area. So how do you realise your investment?
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Old 22.01.2013, 11:44
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Re: EURO growth versus CHF

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True but that does not make it an investment.

When you sell your property you still need somewhere to live. If your property, for example, doubles in price then probably so have all the other properties in the area. So how do you realise your investment?
You can use the Equity in the property when taking a loan from the bank.
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Old 22.01.2013, 12:45
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Re: EURO growth versus CHF

EUR _ CHF Analysis from xe.com:

EUR-CHF retraced the recent rally on fund profit taking and corporate demand for swissy. The cross fell sharply from 1.2570 highs to just under 1.2400. The pace of the turnaround forced out weak longs in EUR-CHF and the tone is more defensive as a result. Selling pressure was noted just over 1.2450 in Asia and early European accounts pressured bids in front of 1.2400. EUR-CHF price action looks mobile though and one leading Swiss name has readjusted a long EUR-CHF trade to target 1.2750 from an intial target of 1.2550. We expect dip buying to continue, with barriers at 1.2575 and 1.2600 a target.
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