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Old 06.04.2007, 10:10
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Weak Swiss Franc

Hi,

This is one of those things that really does not currently have any influence on my life, but seems to bother me every now and then.

Coming from a € country, I have the bad habit of looking at the currency rates every now and then. Our SFr. or CHF or whatever you wish to call it is not doing very well against the €. Yes, I know the influence on export etc. but to me it seems to mean that I earn less than before. This is, I am stupid enough to convert prices to € even though I do not currently have any income in €.

Does anyone else have the same kind of (mental) problem? If so, how do you manage it? Can we find any good impacts on personal level in this situation (forgetting the exports etc.)? Could we even benefit somehow, having the ability to do our finances in both currencies (bank relationship in both € and CHF land)?

Pekka
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Old 06.04.2007, 11:23
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Re: Weak Swiss Franc

It is not just against the Euro either. I am about to go back home to Sydney in the first time in 5 years, and of course, the Pacific Peso is about to reach parity with 'ol Francy for the first time in years.
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Old 06.04.2007, 11:34
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Re: Weak Swiss Franc

I'm loving it on the other hand, nothing better than a strong pound when you go to Switz
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Old 06.04.2007, 11:57
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Re: Weak Swiss Franc

We have just been trying to treat the Franc as if it was equal to the dollar, thus encouraging us to spend carefully.
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Old 06.04.2007, 16:05
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Re: Weak Swiss Franc

I have thought about one good thing in this situation. We still have a flat in Finland and compared to CHF it keeps growing in value. At the same time here the prices somewhat steady. So, if my long term plan is to stay here and perhaps buy property, I will benefit from weak CHF. Other than that, plus the fact that I do not believe that the high property prices in Helsinki will hold for long, I will lose money.

Any speculations on how the value of CHF will develop? Maybe our friends across the atlantic organise something in the middle east and cause enough instability to streghten the franc? Or is this a realistic scenario anymore?
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Old 06.04.2007, 16:39
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Re: Weak Swiss Franc

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I have thought about one good thing in this situation. We still have a flat in Finland and compared to CHF it keeps growing in value. At the same time here the prices somewhat steady. So, if my long term plan is to stay here and perhaps buy property, I will benefit from weak CHF. Other than that, plus the fact that I do not believe that the high property prices in Helsinki will hold for long, I will lose money.

Any speculations on how the value of CHF will develop? Maybe our friends across the atlantic organise something in the middle east and cause enough instability to streghten the franc? Or is this a realistic scenario anymore?
I wish I knew. I've got funds in CHF and the fact that it's weak is making me hold back from moving them into something more 'useful' to me. On the other hand, I could get a better rate of interest from the bank if I had them converted now.

What normally makes the Franc go up in value is a good old international crisis or generally poor economic situation in the Western economies. The Franc is very much a 'safe haven' currency that people buy into when they get nervous about the major trading currencies.

However, with the introduction of the Euro making a triangle of global 'strong' currencies then it's difficult to say if investors won't simply flit between Dollar, Pound and Euro leaving the Franc languishing.
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Old 06.04.2007, 16:53
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Re: Weak Swiss Franc

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Any speculations on how the value of CHF will develop?
Here's one analysis that sees more room for decline vs. the Euro: http://www.gocurrency.com/outlook-usd-chf.htm

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Maybe our friends across the atlantic organise something in the middle east and cause enough instability to streghten the franc? Or is this a realistic scenario anymore?
Unfortunately I'd say it's all too realistic, which is painful to me both from a political standpoint, and as someone who earns USD but spends CHF and has been beaten over the head repeatedly for the last few years...
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Old 07.04.2007, 18:48
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Re: Weak Swiss Franc

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Does anyone else have the same kind of (mental) problem? If so, how do you manage it? Can we find any good impacts on personal level in this situation (forgetting the exports etc.)? Could we even benefit somehow, having the ability to do our finances in both currencies (bank relationship in both € and CHF land)?

Pekka
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%.

As for currency rates, the important thing is the interest rate paid on a given currency. For example, I can get 5.15% to 5.65% gross interest on accounts held in sterling, versus about 1% on CHF. If you get an account at somewhere like xe.com you can convert currencies at very good rates. IMO that is a good thing to do with spare cash that you can afford to leave alone for 6 months to a year.
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Old 07.04.2007, 19:13
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Re: Weak Swiss Franc

When I came here in 1989 the rater was CHF3.25 = £1, by 1993 this was CHF1.95 = £1.

In the 1950s the CHF20 note was called 'The Pound' as that's how many there were to a pound.

The Swiss National Bank and their gold reserves know what they are doing. I would say it is more a strong euro and pound, than weak CHF at the moment - which won't help those paid in CHF and wanting to spend in other currencies. But history shows the franc will be back...

You can see 15 year variations of assorted currencies here:
http://fxtop.com/en/historates.php3
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Old 10.08.2007, 10:39
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Re: Weak Swiss Franc

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But history shows the franc will be back...

I think it has started.
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Old 10.08.2007, 18:18
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Re: Weak Swiss Franc

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I think it has started.
Looks like the 'butt of the carry trade' times of the Swiss franc may be over alright.

From yesterdays Torygraph:

http://www.telegraph.co.uk/money/mai.../bcnecb109.xml

"The Japanese yen and the Swiss franc both strengthened as flight from risk caused investors to unwind "carry trade" bets, whereby they borrow money at rock-bottom rates in Tokyo or Zurich to chase higher yields elsewhere."


Looking at xe.com shows that indeed the Franc has strengthened over recent times. Looks like the turmoil in the financial markets has had the exepected effect of strengthening the Franc.
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Old 21.08.2007, 11:36
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Re: Weak Swiss Franc

Woooah - looks like the Franc is on the rise (or Sterling is on the way down, probably a bit of both)

Latest exchange rate from www.xe.com :

Live rates at 2007.08.21 09:28:16 UTC
1.00 CHF = 0.420126 GBP

Switzerland Francs United Kingdom Pounds 1 CHF = 0.420126 GBP 1 GBP = 2.38024 CHF

I've seen it as low as 0.408 back at the start of July .. Wonder how high it can go before I convert my stack of Francs back to Sterling?

On the other hand, given some of the things I hear about the British market outlook maybe it'd be better left in Switzerland/Francs just for security.

If the Bank of England go for low interest rates to save the necks of borrowers/lenders sterling savers could see their pot of cash evaporate away with inflation.
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Old 22.08.2007, 04:34
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Re: Weak Swiss Franc

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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!!!" It's taken a while but I now try to do the same as you do!
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