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  #41  
Old 01.06.2011, 19:31
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Re: Sterling to CHF Exchange Rate

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On the face of it, no. However once you consider that many of the inputs that Switzerland uses to make it products come from abroad than the picture is somewhat better.

Consider Sprungli. They but their coaca bean from abroad, for arguments sake and through an intermediary in London. The relative cost in sterling for a kilo of beans has fallen sharply over the past year. This mean they should be able to reduce their prices somewhat to compensate for the rising franc. It all depends on how much the inputs represent of the total cost base. In the case of Sprugli I would imagine its quite low, but for other industries it could be much higher.

Another point is that Switzerland has been somewhat shielded from the rise in oil costs by the strong franc. Oil is generally traded in US dollars so any rise Vs the dollar is actually good news for Switzerland on that front. Fuel is a major component of the cost of doing business in most industries.

It's worth noting that Swiss exports rose 5% last quarter despite the strong franc.
And also bear in mind that just as you or I can go to Euroland or Stirlingland or Dollarland and buy stuff cheap, so can Swiss companies go abroad and buy companies there so the exchange rate is making it easier for them to expand.
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  #42  
Old 01.06.2011, 19:32
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Re: Sterling to CHF Exchange Rate

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Although it's great for me since I have more pounds for my franc...it can't be great for Switzerland's exports can it?
Swiss sell on quality not price.

Would you buy a Casio watch not Rolex because it is a few hundred cheaper
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  #43  
Old 01.06.2011, 19:40
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Re: Sterling to CHF Exchange Rate

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If the france rises against the pound much more it's going to make it very difficult for me to ever leave this place
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  #44  
Old 01.06.2011, 20:04
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Re: Sterling to CHF Exchange Rate

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Swiss sell on quality not price.

Would you buy a Casio watch not Rolex because it is a few hundred cheaper
I'd never buy a casio but, given the price of a Rolex, I might choose something cheaper, like something from Tiffany, Cartier or Omega. The Swiss don't have the corner on the market on luxury watches. Sure, Rolex is a recognizable brand, but there are far more luxurious brands out there that might be less expensive.

I've not quite figured out how the swiss economy works when prices are so incredibly inflated in comparison to the neighbouring countries. Now that the currency is getting stronger, it's even more puzzling.
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  #45  
Old 01.06.2011, 20:29
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Re: Sterling to CHF Exchange Rate

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I've not quite figured out how the swiss economy works when prices are so incredibly inflated in comparison to the neighbouring countries. Now that the currency is getting stronger, it's even more puzzling.
A break down for you: CH exports quality products (were talking high value not beer etc) so even with an overvalued franc, demand remains or actually increases. Lots of their sales are in emerging markets since EU US UK pack are kinda broke anyways. Patek phillipe sells watches for around 20-150k. The chinese buy them with $, as the franc appreciates, their price goes up in $. That in turn boosts their value to the in the eyes of the buyer i e the expensive they get, the more the Chinese want them. Patek phillipe said that their sales in China increase as prices increases due to exchangE rates.
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  #46  
Old 01.06.2011, 20:34
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Re: Sterling to CHF Exchange Rate

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Swiss sell on quality not price.

Would you buy a Casio watch not Rolex because it is a few hundred cheaper
A digital casio probably keeps better time
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  #47  
Old 01.06.2011, 20:54
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Re: Sterling to CHF Exchange Rate

I shall throw in a few points:

With regard to watches; Switzerland will have problems selling watches as Smart Phones are taking over. I would suspect that not many males under 40 will be considering buying Swiss Watches. Perhaps women will buy a watch as Jewellery.

Now to the Swiss Franc.

The Swiss Franc will remain high for the next 12 months as it is being used as a currency of safety due to the US$ and the Euro being screwed because both the EC and USA are bankrupt.
In fact if you look at the graph of CHF to Gold; gold has gone down against the CHF in the last 6 months becuase it is the US Dollar that has gone down as opposed to Gold going up.

Where I see the Swiss Franc going is that it will start to fall dropping against the Euro and Dollar in 18 months time and this is my explanation:

Large Swiss companies such as Nestle have subsidiaries most of their manufacturing and distribution abroad. These companies obviously tade in local currency. Though they are profitable in their own country, when the profits are converted to Nestle Holding Company in Swiss Francs they will be much smaller and Nestle will therefore make a smaller profit. It will therefore pay less Corporation tax and therefore the Swiss government will have less tax coming in. On another note, the shares will fall because Nestle will only be able to pay a smaller dividend. This will result in the share price falling.

Swiss companies will have problems exporting from Switzerland because there currency is too high and potential foreign buyers will be forced to buy elsewhere. This will effect exports and revenue and profit and we have the same scenario as above.

I therefore believe that the economy of Switzerland will get worse in about 2 years time and the currency will fall back to CHF2 to GB£1 and unemployment will kick in. However, it will not get as bad as the EC and USA which I think is doomed. You can all kiss goodbye to your state pensions if you are under 40.
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  #48  
Old 01.06.2011, 21:00
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Re: Sterling to CHF Exchange Rate

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I shall throw in a few points:

With regard to watches; Switzerland will have problems selling watches as Smart Phones are taking over. I would suspect that not many males under 40 will be considering buying Swiss Watches. Perhaps women will buy a watch as Jewellery.
.

Have you ever been to Basleworld????

Take a look at this years sales figures for the big Swiss watch groups - they've never had it so good. exchange rate seems to have no effect.

Not only do the young men under 40 buy the latest smart phones but they also own multiple wrist watches....
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  #49  
Old 01.06.2011, 21:12
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Re: Sterling to CHF Exchange Rate

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I shall throw in a few points:

With regard to watches; Switzerland will have problems selling watches as Smart Phones are taking over. I would suspect that not many males under 40 will be considering buying Swiss Watches. Perhaps women will buy a watch as Jewellery.
We are project partners in a diamond business in Africa. Almost all of the demand growth in the last 5 years (outside of 'sand-paper' and drill bits in China) has been from watch makers adding gaudy features to their product. The demand growth for more expensive watchs has been amazing, EVen with Smart Phones.
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  #50  
Old 01.06.2011, 21:45
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Re: Sterling to CHF Exchange Rate

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It will therefore pay less Corporation tax and therefore the Swiss government will have less tax coming in. On another note, the shares will fall because Nestle will only be able to pay a smaller dividend. This will result in the share price falling.
Maybe for Swiss shareholders, that would be a problem. But many Nestle shareholders are international, so with a strong CHF, even a reduced dividend looks good when converted back into weakened USD, EUR, GBP or whatever. Shareholders will see no reason to lose confidence.
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  #51  
Old 02.06.2011, 00:36
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Re: Sterling to CHF Exchange Rate

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I'd never buy a casio but, given the price of a Rolex, I might choose something cheaper, like something from Tiffany, Cartier or Omega. The Swiss don't have the corner on the market on luxury watches. Sure, Rolex is a recognizable brand, but there are far more luxurious brands out there that might be less expensive.

I've not quite figured out how the swiss economy works when prices are so incredibly inflated in comparison to the neighbouring countries. Now that the currency is getting stronger, it's even more puzzling.
About "like something from Tiffany, Cartier or Omega." for me Tiffany, Cartier are not recognised Swiss watch brands. You coud be buying a very cheap mechanism with an expensive designer name.

Omega is a good Swiss watch name & I have one on my wrist as I write. Nevertheless Rolex is a solid Swiss watch name (like others) & people will pay the price regardless of market exchange rate fluctuations.
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Old 02.06.2011, 00:40
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Re: Sterling to CHF Exchange Rate

"Sterling to CHF Exchange Rate" not "What man jewelry I wear". Thanks.

(Non-watch wearer - could you guess?)
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  #53  
Old 06.06.2011, 16:03
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Re: Sterling to CHF Exchange Rate

Anyone had a look at the exchange rate today, must be a record low now, anyone any views on just how low it might go before turning round.
Must be great for Swiss going to UK for hols etc.
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  #54  
Old 06.06.2011, 16:29
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Re: Sterling to CHF Exchange Rate

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Anyone had a look at the exchange rate today, must be a record low now, anyone any views on just how low it might go before turning round.
Must be great for Swiss going to UK for hols etc.
It could go lower... Depends on when interest rates are raised and whether the BoE inflates the currency (quantitative easing) any more.
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  #55  
Old 06.06.2011, 16:29
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Re: Sterling to CHF Exchange Rate

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I shall throw in a few points:

With regard to watches; Switzerland will have problems selling watches as Smart Phones are taking over.
are you saying peoples wrist sizes are on the increase

even if watch sales did go down.. then it will be in no relation to smart phones. Mobile phones have been out a long long time and ive yet to see one without a clock on it.
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  #56  
Old 19.06.2011, 23:26
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Re: Sterling to CHF Exchange Rate

i cant believe how low the rate has got. i feel like i should be sending every rappen home. i would if i had a reason to:
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  #57  
Old 22.06.2011, 18:17
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Re: Sterling to CHF Exchange Rate

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This is a fun thread to bring alive!

£1 = 1.404 CHF (xe.com)
£1 = 1.349 CHF (xe.com)
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Old 22.06.2011, 18:26
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Re: Sterling to CHF Exchange Rate

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£1 = 1.349 CHF (xe.com)
We touched 1.3459 an hour or so ago....
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Old 22.06.2011, 20:36
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Re: Sterling to CHF Exchange Rate

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We touched 1.3459 an hour or so ago....
Dear god! I hardly dare go back to CH.
All our pensions are in £ and $.
It's really most un-funny
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Old 22.06.2011, 20:49
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Re: Sterling to CHF Exchange Rate

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Dear god! I hardly dare go back to CH.
All our pensions are in £ and $.
It's really most un-funny
But when are you going to retire? Next week or in 10+ years.
I am buying US assets whilst nobody wants them!
It's a little bit like buying gold because it's $1500, when you could have bought for $300 10 years ago.
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