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-   -   Weak Swiss Franc (https://www.englishforum.ch/finance-banking-taxation/5671-weak-swiss-franc.html)

post from holland 21.08.2007 17:56

Re: Weak Swiss Franc
 
any opinion welcome

Fraser 21.08.2007 18:00

Re: Weak Swiss Franc
 
Quote:

Originally Posted by post from holland (Post 95645)
back to my question: can anybody comment on the little calculation i did please ?

i dont see it as a gamble, i simply want overload som CHF to a euroaccount, because i intend (as many here) to go back to euroland in 3 to 4 years time and dont wanna savingsaccount with just 1% interest.
and wonder if now is a good time to do it and only suffer minor currency loss.

any opinion welcome

If it's euros you want, then it's euros you should have. You'll not carry any currency risk, other than the fact that you might make more money over the 3-4 years if you kept your cash in swiss francs and the CHF strengthened against the EUR. I'm considering doing exactly the same thing as you at present and I reckon it's worthwhile.

post from holland 21.08.2007 19:08

Re: Weak Swiss Franc
 
hanging on just a little longer.

GVA offline 21.08.2007 19:40

Re: Weak Swiss Franc
 
The CHF will probably appreciate against both USD and EUR over the coming months. The current rise is mainly due to USD weakness and the unwinding of the carry trade.

muze7 21.08.2007 20:13

Re: Weak Swiss Franc
 
You can also open a Euro account in Switzerland, for example Postfinance offers 1.825% I think. This is what I am doing as you can withdraw Euros without cost at the ATM machine while here, which is handy before going on holiday, and you can also transfer CHF to Euro without cost, so you can transfer small amounts regularly, so you spread your exchange rate risk rather than transferring large sums and risking that the CHF gains even more.

Then when you leave you transfer the Euros to a European bank without exchange losses. There is an offer for 3.6% interest until the rest of the year on euros in an electronic savings account at Postfinance.

By the way, where do you get the 3.7% offer in the Netherlands from? That seems high for a savings account without withdrawal restrictions.

Polorise 21.08.2007 21:01

Re: Weak Swiss Franc
 
[quote=muze7;95668]You can also open a Euro account in Switzerland, for example Postfinance offers 1.825% I think. This is what I am doing as you can withdraw Euros without cost at the ATM machine while here, which is handy before going on holidayquote]

Muze, wouldn't it be more pracrical to put into a higher interest yield Euro account ? UBS & Credit Suisse, you can draw Euro at no extra cost with your normal conto card.
Or am I being dumber than usual on this, something I'm missing ?

SWilkinson 22.08.2007 04:34

Re: Weak Swiss Franc
 
Quote:

Originally Posted by BeastOfBodmin (Post 49205)
After being here only 7 months, I do keep trying to convert from CHF to UKP. Just after I came here in late August 2006, the Bank of england put up interest rates and the CHF went from about 2.35 to 2.45 to the pound. I felt like I'd had a pay cut!

Now I realise that is a stupid attitude. What I try to do instead is compare costs as a proportion of my net salary.

For example, I paid a total of 32.9% in income tax and NI in the UK. Here, I pay only 25.3%. My rent in the UK was 25.2% of my net, and here it is about the same, at 25.4%.

I also found myself doing the same thing, you know...."How much! That's 20 quid!!!" :D It's taken a while but I now try to do the same as you do!

BeastOfBodmin 22.08.2007 07:56

Re: Weak Swiss Franc
 
Quote:

Originally Posted by post from holland (Post 95549)
hi , also interested in this. suppose i brought 10.000 CHF to a euro savings account... would this be beneficial because the savingsaccount bring more interest?

example bringing CHF to an euro account to profit from higher saving accounts

example
savings in CHF : 10000 CHF at XXX savingsaccount against 1.5 % interest
in 5 years 10'772.84
increase of 772.84 chf

bringing 10000 CHF to Euro account=6160 EURO (calculated at 21 august , rate 1 CHF= 0.616 EURO)
in 5 years at rate 3,75% interest at savingsaccount XXX
7'316.15
increase of = 1'156.15 euro

Nice analysis :)

Quote:

Originally Posted by post from holland (Post 95549)
now how do i compare ??

Tricky question, IMO. Because over 5 years you don't know what the exchange rates will be like. Maybe ask something like "What must the exchange rate be, after 5 years, so that my Francs + interest are worth more than the Euros + interest?".

Also, don't you think you should consider the tax on the interst gained also? e.g. UK @ 20%, Switzerland @ 35%.

Quote:

Originally Posted by post from holland (Post 95549)
converting the 1156 euro to chf = 1877 CHF (calculated at 21 august , rate 1 euro= 1.6234 CHF today) hence a difference in growth of over 1000 CHF, if you would convert today . of course it all depends what the rate of chf would be in 5 yrs

please note it is JUST an example.... ofcourse there is bank x and bank y with better / different rates.
these happen to be some i know. both saving accounts are type: no fixed periods, you can always withdrawl your money without penalties

any feedback ?
thanks
P F H


Guest 22.08.2007 08:21

Re: Weak Swiss Franc
 
...and a primary driver of exchange rates is relative interest rates.

dave

Quote:

Originally Posted by BeastOfBodmin (Post 95748)
Tricky question, IMO. Because over 5 years you don't know what the exchange rates will be like. Maybe ask something like "What must the exchange rate be, after 5 years, so that my Francs + interest are worth more than the Euros + interest?".


post from holland 22.08.2007 08:55

Re: Weak Swiss Franc
 
..........................................

Richard 22.08.2007 10:04

Re: Weak Swiss Franc
 
Quote:

Originally Posted by DaveA (Post 95753)
...and a primary driver of exchange rates is relative interest rates.

dave

But the primary driver is balance of trade figures... Hence the drop in value of the US dollar over the past years despite high interest rates...

post from holland 22.08.2007 11:56

Re: Weak Swiss Franc
 
i just looked in my ..oops dropped my cristal ball :dunno:

muze7 22.08.2007 20:14

Re: Weak Swiss Franc
 
Quote:

Muze, wouldn't it be more pracrical to put into a higher interest yield Euro account ?
Perhaps you could tell me which? UBS only gives 1% on a Euro savings account. Do you mean term deposits?

Quote:

UBS & Credit Suisse, you can draw Euro at no extra cost with your normal conto card. Or am I being dumber than usual on this, something I'm missing ?
I was told by an UBS adviser that if you withdraw Euro at a UBS machine in Switzerland from a Euro account, you pay 1% of the total. Unless that is person is wrong, that is pretty bad :eek:. No I checked it, the UBS prices pdf says this too! Rip off I say.

post from holland 27.08.2007 15:18

Re: Weak Swiss Franc
 
FYI my financial cristal ball :strengthening of the CHF vs Euro only temporary

Pekka 27.08.2007 18:19

Re: Weak Swiss Franc
 
Quote:

Originally Posted by post from holland (Post 97815)
FYI my financial cristal ball was right: the past strengthening of the CHF vs Euro was only temporary. Euro is now almost back to beginning of jylu.
hope you used the glimps to convert some

I managed to convert some. Calculate the hours I spent speculating and watching the rates, it certainly was not worth it! But what can you do when you are cheap...

post from holland 28.08.2007 08:52

Re: Weak Swiss Franc
 
i also was cheap and only a small amount (gambling on that there will be more glimps in the future)

chuk 28.08.2007 08:56

Re: Weak Swiss Franc
 
I think there's alot more to come, the carry trade is not as effective if not dead soon, placed a FX trade yesterday in the night in the region of 2.41, think the rate will drop alot more, will add more to it at 2.38 or get out at 2.43 ish.

muze7 28.08.2007 15:37

Re: Weak Swiss Franc
 
You mean you think the Franc will gain again? I think so too, I do not think the credit crunch is over yet.

chuk 28.08.2007 21:07

Re: Weak Swiss Franc
 
it's only a opinion but yes I believe that, at this moment the USF/CHF is trying (but not succeeding yet) to break under a nice psychological 1.2000, a lot may depend on whether this goes or not

post from holland 28.08.2007 21:57

Re: Weak Swiss Franc
 
but what will the chf do towards the euro ?


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