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

muze7 28.02.2008 18:05

Re: Weak Swiss Franc
 
For anyone interested in exchanging into Euros, the Euro to Franc ratio has dipped below 1.60 again, and it almost reached 1.05 USD!

This is insane, we might reach 1:1 on the dollar!

Info 28.02.2008 18:28

Re: Weak Swiss Franc
 
Quote:

Originally Posted by Gav (Post 180669)
Holy moley - could we be heading for 2CHF=1GBP?


Live rates at 2008.02.27 21:57:30 UTC 1.00 CHF

=

0.474691 GBP

Six months ago:

Live rates at 2007.08.15 09:39:33 UTC 1.00 CHF

=

0.414355 GBP


So my SFr cash savings have appreciated (in sterling terms) by almost 15% in six months.

Woohoo! :D

Except, most of it is in UBS.

D'oh! :eek:

Good post. Don't you however think that all this gain (or loss) is only notional and the actual gain/loss matters only when we really exchange..

One of my friends exchanged a lot of CHF to GBP 2 weeks ago at 2.17 when it started jumping from 2.14 to 2.18 assuming the bottom (2.17) was reached in order to get a better interest on the GBP. See his plight today.. In just two weeks, what a loss (again notional loss)!! .

Same with USD.. 10 days ago it was 1.10 when there were so many articles stating that USD was going to become strong and see it now!!

Its all so confusing and hard to predict.

CHF is getting stronger for sure.. But, for how long is anyone's guess...

Gav 28.02.2008 18:39

Re: Weak Swiss Franc
 
Quote:

Originally Posted by Info (Post 181094)
Good post. Don't you however think that all this gain (or loss) is only notional and the actual gain/loss matters only when we really exchange..

One of my friends exchanged a lot of CHF to GBP 2 weeks ago at 2.17 when it started jumping from 2.14 to 2.18 assuming the bottom (2.17) was reached in order to get a better interest on the GBP. See his plight today.. In just two weeks, what a loss (again notional loss)!! .

Same with USD.. 10 days ago it was 1.10 when there were so many articles stating that USD was going to become strong and see it now!!

Its all so confusing and hard to predict.

CHF is getting stronger for sure.. But, for how long is anyone's guess...

Yes - you're right about only realising the gains upon exchange.

The thing is, the UK pound is tipped to take a real hammering soon. Many pundits claim that it is overvalued. So it could well fall further against the CHF and even against the USD.

I think we need a thread for investment opinions here. I'm thinking of either converting some to GBP and buying NS&I bonds and buying some gold, as well as continuing to hold some as CHF 'cash'. But I'm sure there are a few informed posters here whose opinions would be very welcome.....

Lob 28.02.2008 18:42

Re: Weak Swiss Franc
 
Don't forget, in the last 12 years, the Franc has gone from 1.8 to 2.4 to the pound.

And back?

AbFab 28.02.2008 19:05

Re: Weak Swiss Franc
 
My view on this is that the UK property boom will be followed by a drop in the value of the pound. Either that or the pound holds and property (ie land) prices collapse.

Essentially this what has happened over the last 60 years...

Gav 28.02.2008 19:14

Re: Weak Swiss Franc
 
Quote:

Originally Posted by AbFab (Post 181119)
My view on this is that the UK property boom will be followed by a drop in the value of the pound. Either that or the pound holds and property (ie land) prices collapse.

Essentially this what has happened over the last 60 years...

What you say makes sense - there is a strong possibility that the government will throw prudence to the wind and press the Bank of England to push Interest Rates ever lower to ease problems linked to debt. This will be mostly for the benefit of the banks and finance sector (so they can borrow cheaply from the Central Bank to get themselves out of the hole) but will have a pleasing side effect of making debt-ridden British voters and homeowners a lot happier too.

This strategy would really hammer the pound.

I predict that they'll probably cut by more than they should with regard to inflation dangers, pushing sterling lower - but the housing market is stuffed anyway. When you see the sort of silly amounts people were paying for houses you have to come to the conclusion that the boom went on for too long and the bubble inflated way too much.

eg. Northern Ireland. Average salary ~20k pa. Average house price ~240k. Total madness.

muze7 28.02.2008 20:33

Re: Weak Swiss Franc
 
Quote:

there is a strong possibility that the government will throw prudence to the wind and press the Bank of England to push Interest Rates ever lower to ease problems linked to debt. This will be mostly for the benefit of the banks and finance sector (so they can borrow cheaply from the Central Bank to get themselves out of the hole) but will have a pleasing side effect of making debt-ridden British voters and homeowners a lot happier too.
Basically, you are saying they will pull a Bernanke? That would weaken the pound relative to the Euro too, if Trichet from the European Central Bank sticks to his guns and keeps the interest rate fixed, or even raises it. And isn't it true that the property boom in the UK has been stronger than in most mainland western European countries? (Germany, France, the Benelux etc.?).

By the way, who else feels that the fall of the dollar is imminent? By this I mean not just the slow sliding that has been going on for a few years now but a permanent drop where suddenly, the momentum increases to such an extent that the final trust in the USD is lost, and we see a permanent switch to other currencies? Basically, I am saying the 1.52 USD to the Euro could be the start of a drastic further uptrend, and that we do not see it drop again for long, if at all, and then another massive rise.

In which case, buy gold, and make sure some of it is in physical form I would say because people at that point will be hedging against inflation as well as a crisis :msnshock:

PS. What also interesting is that over the last two days, the Euro has gained much against the USD, but the CHF much against the Euro, which to me sounds like people avoiding risk, in other words the carry trade is unwinding. However, the usual indicator is a massive drop in the Aussie dollar (because of the massive difference in interest rate between the CHF and AUD, perhaps even 6% at present?), and the AUD has stayed very stable over the last 3 weeks, so if people are buying francs, where is it coming from? What I am thinking is, if people have so much faith in the Aussie dollar suddenly (in contrast to the December drops), then perhaps the Aussie dollar has decoupled from the US dollar to such an extent that even the carry traders have more faith in the Australian economy than in risks associated with some currencies.

I am no expert, but it feels like that is an enormously bad sign for the USD. Ok, I now found this on Bloomberg:
Quote:

``There is very real concern that there is a possibility of a dollar crisis,'' said Paul Chertkow, head of global currency research at Bank of Tokyo Mitsubishi UFJ Ltd. in London, in an interview with Bloomberg Radio. ``I don't use the word crisis lightly; we are in uncharted territory for the dollar, especially against the euro..........The U.S. Dollar Index, which tracks the currency against six major counterparts, touched the lowest since its start in 1973. The index, traded on ICE Futures in New York, fell to 73.63,''

Gav 28.02.2008 21:08

Re: Weak Swiss Franc
 
Quote:

Originally Posted by muze7 (Post 181142)
Basically, you are saying they will pull a Bernanke? That would weaken the pound relative to the Euro too, if Trichet from the European Central Bank sticks to his guns and keeps the interest rate fixed, or even raises it. And isn't it true that the property boom in the UK has been stronger than in most mainland western European countries? (Germany, France, the Benelux etc.?).

By the way, who else feels that the fall of the dollar is imminent? By this I mean not just the slow sliding that has been going on for a few years now but a permanent drop where suddenly, the momentum increases to such an extent that the final trust in the USD is lost, and we see a permanent switch to other currencies? Basically, I am saying the 1.52 USD to the Euro could be the start of a drastic further uptrend, and that we do not see it drop again for long, if at all, and then another massive rise.

In which case, buy gold, and make sure some of it is in physical form I would say because people at that point will be hedging against inflation as well as a crisis :msnshock:

PS. What also interesting is that over the last two days, the Euro has gained much against the USD, but the CHF much against the Euro, which to me sounds like people avoiding risk, in other words the carry trade is unwinding. However, the usual indicator is a massive drop in the Aussie dollar (because of the massive difference in interest rate between the CHF and AUD, perhaps even 6% at present?), and the AUD has stayed very stable over the last 3 weeks, so if people are buying francs, where is it coming from? What I am thinking is, if people have so much faith in the Aussie dollar suddenly (in contrast to the December drops), then perhaps the Aussie dollar has decoupled from the US dollar to such an extent that even the carry traders have more faith in the Australian economy than in risks associated with some currencies.

I am no expert, but it feels like that is an enormously bad sign for the USD.

Thing is, interest rates have been slashed and the Fed has been increasing US money supply like no-one's business ... as well as apparently loaning at face value against CDOs and MBSes to troubled banks and brokerages :eek:

Yet the dollar hasn't totally folded like you would expect.

Remember, lots of important stuff is bought/sold in dollars - ie Oil and Gold. That provides a hard floor for the dollar. Also, many countries hold large amounts of dollar foreign reserves, further lending support.

Also, the US is one of the largest markets for manufacturers throughout the world. America will basically export their inflation to the rest of the world as other countries find themselves lowering interest rates in order to not appreciate too much against the dollar (making their exports to the USA uncompetitive).


Tipping point would be if those holding large amounts of dollars totally lost faith in the dollar holding its value and thus dumped their dollar holdings. Maybe we'd see the oil states start selling in Euros or a basket of currencies and exporters giving up on the US as a country that would never pay its debts. Then I guess we'll see a few nuclear armed carrier groups being deployed to various 'troublesome' countries. Nothing like a bit of gunboat diplomacy.

29.02.2008 09:49

Re: Weak Swiss Franc
 
Quote:

Originally Posted by robban (Post 158834)
I'll have a go, since I was born in the year of decimalisation. Assuming no tricks...

3 sovereigns 15 bob and three farthings or 3 15s 3/4d.

Do I win a lump of coal? :)



Yes, I got the same - but didn't the farthing cease to be legal tender well before 1968?

29.02.2008 10:02

Re: Weak Swiss Franc
 
Quote:

Originally Posted by lynnecon (Post 181307)
Yes, I got the same - but didn't the farthing cease to be legal tender well before 1968?

Production of farthings stopped in 1956 and they were withdrawn in 1960

And back on topic, I bought a computer direct from the US at the end of 2000. The exchange rate then was ~1.8 Francs to the USD. With shipping and MWST, USD 2,500 worked out at just short of CHF 5,000.

Shorrick Mk2 29.02.2008 10:59

Re: Weak Swiss Franc
 
Quote:

Originally Posted by Gav (Post 181103)
I think we need a thread for investment opinions here. I'm thinking of either converting some to GBP and buying NS&I bonds and buying some gold, as well as continuing to hold some as CHF 'cash'. But I'm sure there are a few informed posters here whose opinions would be very welcome.....


Apparently there's a guy on glocals.com offering "scalable leverage strategies" delivering 100% plus returns over days. He claims that 99.9% of the people do not have "what it takes" to select the real winning stocks (possibly inferring that he is part of the 0.1%). Then again I'm told his strategies are based on a few days' holding period, so maybe it's more gambling than anything.

Maybe he should be invited over...

muze7 01.03.2008 00:39

Re: Weak Swiss Franc
 
Battle wounds in the currency markets: CHF to USD at 1.04:1 now, CHF to Euro at 1:1.58, gaining 2 cts in a single day, highest level of the CHF to the Euro in years...

Edit: Yes, you can get term deposits at 8% now in Oz, for one year. Ingdirect and Rabobankplus are good ones, no fees.

Ozsh 01.03.2008 03:44

Re: Weak Swiss Franc
 
If your willing to look beyond European currencies you can consider holding savings in Aussie which is more or less equal in value to the Swissie but at much higher yields around 6%.

http://www.hsbc.com.hk/1/2/hk/invest...t&currency=AUD

DC_in_Hombi 02.03.2008 09:53

Re: Weak Swiss Franc
 
Quote:

Originally Posted by Gav (Post 180669)
Holy moley - could we be heading for 2CHF=1GBP?


Friday it nearly happened 2.072 to buy 1 pound. 12.4% increase since Sept.

DC

Gav 02.03.2008 10:46

Re: Weak Swiss Franc
 
Quote:

Originally Posted by muze7 (Post 181774)
Battle wounds in the currency markets: CHF to USD at 1.04:1 now, CHF to Euro at 1:1.58, gaining 2 cts in a single day, highest level of the CHF to the Euro in years...

Edit: Yes, you can get term deposits at 8% now in Oz, for one year. Ingdirect and Rabobankplus are good ones, no fees.

Obviously you have to consider currency variations.

For example, I took a look at moving my CHF savings to Sterling last August (could have got about 6.5% APR interest on sterling savings) but decided against it as GBP was relatively strong against the Franc.

Since then, the CHF has appreciated almost 15% against GBP. So I would have lost out if I converted then.

Likewise, you could find the Aus$ depreciating against CHF over the course of your year.... so beware.

Polorise 07.03.2008 12:19

Re: Weak Swiss Franc
 
Quote:

Originally Posted by muze7 (Post 181073)
For anyone interested in exchanging into Euros, the Euro to Franc ratio has dipped below 1.60 again, and it almost reached 1.05 USD!

This is insane, we might reach 1:1 on the dollar!

CHF - $ hit 1.019 about 5 mins ago .... :msnshock:

Gav 07.03.2008 12:46

Re: Weak Swiss Franc
 
Quote:

Originally Posted by Polorise (Post 185166)
CHF - $ hit 1.019 about 5 mins ago .... :msnshock:

That's pretty amazing - I remember it being not far off 1.50CHF per Dollar a few years back.


Also, the CHF is up to 48.6p against the pound :eek: (up from 41.4p just six months ago).

If it hits 50p I'll probably shift my savings.

Polorise 07.03.2008 12:47

Re: Weak Swiss Franc
 
Quote:

Originally Posted by Gav (Post 185192)
That's pretty amazing - I remember it being not far off 1.50CHF per Dollar a few years back.


Also, the CHF is up to 48.6p against the pound :eek: (up from 41.4p just six months ago).

If it hits 50p I'll probably shift my savings.

is giving the a good booting at the moment as well.

muze7 07.03.2008 15:57

Re: Weak Swiss Franc
 
And the Aussie dollar has dipped to the 95 ct range, a pretty strong drop against the CHF too. :eek:

peachy 07.03.2008 16:03

Re: Weak Swiss Franc
 
Quote:

Originally Posted by Gav (Post 182109)
(could have got about 6.5% APR interest on sterling savings)

6.5%? Really?


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