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  #481  
Old 22.12.2010, 14:48
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Re: CHF foreign exchange highs and lows

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Not sure what more the SNB could do?

Move to negative interest rates? They have done it before but it is somehow not a popular move with the locals watching their savings evaporating .....
Buy more euro? They already filled the cellars with many billions of euro which only succeeded in delaying the inevitable CHF rise.

Marton
devaluation ?
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  #482  
Old 22.12.2010, 14:52
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Re: CHF foreign exchange highs and lows

Oh god i hope not, I still have loans to pay
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  #483  
Old 22.12.2010, 14:52
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Re: CHF foreign exchange highs and lows

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Not sure what more the SNB could do?
Well, that's why I was waiting to see 1€=1.25 CHF

I am not an expert, I just sit and watch, trying to understand what I can do now/tomorrow and the consequences of it. Beside buying more euros (foolish, eh...), the SNB has maybe other options, such as causing inflation in Switzerland (by printing more CHF for devaluating the CHF), by suggesting adjustements of taxes for import/export, by forcing somehow the exchange-rate to stay at a stable level. I dunno what is possible, what is impossible, but I know that even for an economically-unsignificant person like me, there can be clear consequences, and there can be clear regrets.

/Paul
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  #484  
Old 22.12.2010, 14:58
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Re: CHF foreign exchange highs and lows

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Move to negative interest rates? They have done it before but it is somehow not a popular move with the locals watching their savings evaporating .....
AFAIK only foreign investors were affected the last time they tried that, not accounts held by residents.

Buying EUR has been pretty much useless in the past and it will be even more useless in the future.
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  #485  
Old 22.12.2010, 15:02
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Re: CHF foreign exchange highs and lows

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Well the SNB president Philipp Hildebrand has been going around talking about a "horror scenario" of 1 euro = 50 rappen.
Do not know over what time scale.....
Timing is always the tricky part... the long run is much easier: "Paper money eventually returns to its intrinsic value -- zero." (Voltaire)

Think it's gonna be different this time around...? I'm not so sure.
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  #486  
Old 22.12.2010, 15:16
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Re: CHF foreign exchange highs and lows

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devaluation ?
I am sure they would love to but how to achieve it, what tools?

Usual mechanisms are;
  • cutting interest rates (as said to negative!)
  • Printing money & buying euros (already tried!)
Maybe they should print some billions & re-equip the army

Marton
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  #487  
Old 22.12.2010, 15:37
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Re: CHF foreign exchange highs and lows

I'm not an expert in the matter but if the SNB does attempt to devalue the CHF against the Euro, is this not only a temporary solution to the problem and doesn't stem the problem of why the Euro and other currencies are devaluing so much.
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  #488  
Old 23.12.2010, 09:48
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Re: CHF foreign exchange highs and lows

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I'm not an expert in the matter but if the SNB does attempt to devalue the CHF against the Euro, is this not only a temporary solution to the problem and doesn't stem the problem of why the Euro and other currencies are devaluing so much.
I don't believe that the Euro or US Dollar are genuinely as much in a freefall right now as opposed to the CHF gaining strength by the minute. If you take a look conversion rates between currencies (other than the CHF), the spikes aren't there. Pity those who rely on tourism in Switzerland to earn their CHFs; I'd choose a Portugese beach for Christmas and New Year and spend my Euros there.

The SNB is hardly likely to devalue the Franc, but they could buy Euros which would have a parallel effect, but if they do, I hope they negotiate some privileges for Switzerland with regards to EU bilaterals.
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  #489  
Old 23.12.2010, 10:07
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Re: CHF foreign exchange highs and lows

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devaluation ?
Not in Switzerland. That would hurt the banks too much, and foreign investors would withdraw their millions. Switzerland is trying a delicate balance between the interests of banks (strong frank) against the interests of exporting industry (weak frank).
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  #490  
Old 23.12.2010, 10:30
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Re: CHF foreign exchange highs and lows

Funny thing with all these exchange rates though.... The German build BMW K1300R motorcycle I've had my eye on
for a few months now still costs around chf 23000, I would expect this to have dropped to chf 20000 now with the rise of the value of the chf....
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  #491  
Old 23.12.2010, 10:46
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Re: CHF foreign exchange highs and lows

One of the Sunday papers ran a story claiming he said it during the SNB's annual monetary policy meeting with the government; that's hardly "going around talking about" EUR/CHF at 0.50. Given some of the Sunday publications' track record I would be cautious when they run that kind of hearsay. It's since been categorically denied by both the government and the SNB, by the way...

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Well the SNB president Philipp Hildebrand has been going around talking about a "horror scenario" of 1 euro = 50 rappen.
Do not know over what time scale.....
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  #492  
Old 23.12.2010, 11:33
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Re: CHF foreign exchange highs and lows

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One of the Sunday papers ran a story claiming he said it during the SNB's annual monetary policy meeting with the government; that's hardly "going around talking about" EUR/CHF at 0.50. Given some of the Sunday publications' track record I would be cautious when they run that kind of hearsay. It's since been categorically denied by both the government and the SNB, by the way...
"One of the Sunday papers ..."
One?

I saw the quote in "der Sonntag", Blick & 20Minuten

About "It's since been categorically denied by both the government and the SNB"

To quote Mandy Rice Davies "well they would wouldn't they"

Marton
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  #493  
Old 23.12.2010, 11:50
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Re: CHF foreign exchange highs and lows

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Funny thing with all these exchange rates though.... The German build BMW K1300R motorcycle I've had my eye on
for a few months now still costs around chf 23000, I would expect this to have dropped to chf 20000 now with the rise of the value of the chf....
So buy it in Germany, then. (Or better still, buy a Triumph. )

Some time soon, even the parochial patriotic Swiss will cotton on to shopping outside Switzerland.
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  #494  
Old 23.12.2010, 13:51
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Re: CHF foreign exchange highs and lows

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Blick & 20Minuten
Bastions of quality journalism?
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  #495  
Old 23.12.2010, 13:55
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Re: CHF foreign exchange highs and lows

Sent some pounds back to the UK and saved 25 francs compared to last month. On such a small amount I was quite please and would pay for a dominos pizza...small pizza anyway...
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  #496  
Old 23.12.2010, 15:10
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Re: CHF foreign exchange highs and lows

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So buy it in Germany, then. (Or better still, buy a Triumph. )

Some time soon, even the parochial patriotic Swiss will cotton on to shopping outside Switzerland.
There was a point 10 (???) years ago when German car dealers in border towns were doing packages for Swiss customers. All the paperwork done for you and you could drive away at the German price.

On the general topic of prices not coming down here in response to the higher franc, a few weeks ago one of the UK papers reported that UK exporters were not using the pound's fall to increase exports, but instead using it to increase profits i.e. they were putting up prices in UK terms. I don't think this was the intention of QE.

The UK company I started my career with made a lot of money back then out of the pound falling - many customers paid in their local currency on 180 days payment terms. When that lot came in the company made enough out of the currency fluctuations alone to buy a computer mainframe.
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  #497  
Old 23.12.2010, 15:13
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Re: CHF foreign exchange highs and lows

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Sent some pounds back to the UK and saved 25 francs compared to last month. On such a small amount I was quite please and would pay for a dominos pizza...small pizza anyway...
Conversely I've watched the token amount I have in a UK bank account to keep it alive dwindle. I'm tempted to simply give it to my brother

Last edited by JVC; 23.12.2010 at 15:31. Reason: typo fixed
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  #498  
Old 23.12.2010, 15:29
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Re: CHF foreign exchange highs and lows

Does anyone think GBP will go lower?
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  #499  
Old 23.12.2010, 15:39
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Re: CHF foreign exchange highs and lows

Someone somewhere does.



OK. I do.
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  #500  
Old 23.12.2010, 15:42
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Re: CHF foreign exchange highs and lows

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There was a point 10 (???) years ago when German car dealers in border towns were doing packages for Swiss customers. All the paperwork done for you and you could drive away at the German price.

On the general topic of prices not coming down here in response to the higher franc, a few weeks ago one of the UK papers reported that UK exporters were not using the pound's fall to increase exports, but instead using it to increase profits i.e. they were putting up prices in UK terms. I don't think this was the intention of QE.

The UK company I started my career with made a lot of money back then out of the pound falling - many customers paid in their local currency on 180 days payment terms. When that lot came in the company made enough out of the currency fluctuations alone to buy a computer mainframe.
The Swiss prices watch dog (forget his name) said some months ago that people should buy their new cars over the border. He also took the opportunity to point out that under Swiss law Swiss dealers must honour warranties on imported vehicles.
He also said something to the effect that he was fed up with the slow pace of currency related price reductions here.
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