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Old 02.08.2011, 21:24
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Re: Swiss Franc Climbs to Record High

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Tourism and exports of engineering and other products are already suffering badly.
Luckily, half our contracts are in CHF, so what we lose on the Euro contracts we hopefully make up (to some extent) on the CHF ones (though only somewhat due to cheaper prices for foreign content (ICs, etc), Swiss labor costs the same).

But, in some cases we do have to suffer losses to keep certain long-term customers.

On the other hand, it's good for my daughter who's going to the US for a couple weeks (for the third time this year, with her saved centesimi).

Tom
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Old 02.08.2011, 21:33
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Re: Swiss Franc Climbs to Record High

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****
Here some extracts from the interview, Swatch chief Nick Hayek gave to NZZ am Sonntag :
Nick Hayek should do everyone a favour and just go back to work instead of asking for intervention. Intervention in the currency markets never works in the long term. What it does do is add even more volatility to the currency market in question. The SNB would without a doubt lose. And whats worse is that it isnt even their money their losing - hence the line of thinking will be something like this -

Ueli : hey hans that buying up of euros and selling of CHF didnt work, what did we do wrong.
Hans : We didnt intervene enough, we need to buy more........sell more francs, and if that doesnt work, sell even more.

It always ends badly.

CHF is currently a safe haven currency in a pond of hopeless major currencies because of all the interventions the world over i.e. bailouts in the US/Europe and continuous loose monetary policies etc etc. Until the major economies stop printing, unfortunately the situation will only worsen (as the distortions only continue and get worse). I just hope the swiss arnt going to do something stupid like start printing themselves. Unfortunately the business council is already banging the drum.
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  #303  
Old 02.08.2011, 21:42
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Re: Swiss Franc Climbs to Record High

I know a few PhDs/postdocs that got accepted for european scholarships which are paid in Euros. Sucks big time if you secured a prestigious one and you're rewarded with loosing a couple of thousand chuffs.
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  #304  
Old 02.08.2011, 21:55
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Re: Swiss Franc Climbs to Record High

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I know a few PhDs/postdocs that got accepted for european scholarships which are paid in Euros. Sucks big time if you secured a prestigious one and you're rewarded with loosing a couple of thousand chuffs.
But think about the funding short fall for the projects that are funded by the EU! Think about the reluctance of the EU to fund projects in Switzerland due to the the strong franc.

Consumables and salaries were higher before...now were are they?
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Old 02.08.2011, 22:00
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Re: Swiss Franc Climbs to Record High

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Consumables and salaries were higher before...now were are they?
If you are paid in CHF, exactly where they were before (if not cheaper).

Tom
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  #306  
Old 02.08.2011, 22:15
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Re: Swiss Franc Climbs to Record High

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But think about the funding short fall for the projects that are funded by the EU! Think about the reluctance of the EU to fund projects in Switzerland due to the the strong franc.

Consumables and salaries were higher before...now were are they?
The EU won't be reluctant to fund projects in Switzerland because they pay out in Euros.

Last edited by zymogen; 02.08.2011 at 22:25. Reason: don't drink while posting
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Old 02.08.2011, 22:29
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Re: Swiss Franc Climbs to Record High

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The EU won't be reluctant to fund projects in Switzerland because they pay out in Euros.
I'd imagine you'd have more experience in applying for project than I being a post doc (What do post docs actually do? )

But you put in for a budget. You ask for x amount on consumbales, y amount for salaries etc.

They pay out in Euros for these things so when you submit for the project you have to ask for even more Euros due to the strong Swiss franc.

Then projects which are ongoing aren't adjusted...a 4 year project which was budgeted for 4 year old exchange rates just now....1.60 francs to the Euro then...1.08 today
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  #308  
Old 02.08.2011, 22:30
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Re: Swiss Franc Climbs to Record High

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If you are paid in CHF, exactly where they were before (if not cheaper).

Tom
The CHF value is the same. But the amount of Euros required to achieve that CHF is higher. When submitted proposals this needs to be taken into account.
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  #309  
Old 02.08.2011, 22:43
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Re: Swiss Franc Climbs to Record High

The best what we as ordinary people can do is to enjoy the situation and make use of it. Holidays in Euroland has never been so cheap.
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  #310  
Old 02.08.2011, 22:47
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Re: Swiss Franc Climbs to Record High

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What do post docs actually do?
We're keeping the PhDs busy!

I haven't been involved with many grant applications (was talking about personal scholarships in my previous post). But my previous boss mentioned that there are often fixed amounts of money for salaries and consumables. It might vary on the grant that one's applying for though.
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Old 03.08.2011, 09:24
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Re: Swiss Franc Climbs to Record High

It's actually not the Swiss Frank rising, its the Dollar and the Euro collapsing over the years. The Swiss Frank is known to be a very stable currency and that makes it even worse because in times of economic crisis people buy it to not lose too much money.

My dad works at the stocks market. He does not excpect the Euro or the Dollar to raise anytime soon. The dollar will stay low to devalue the federal dept and with the Euro... if some country just mumbles of being out of money soon it drops 0.1 percent. And if Spain, Portugal, Italy, Ireland or any other country has problems like Greece it will drop even below the 1 Frank mark like the U.S. dollar did.
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  #312  
Old 03.08.2011, 09:33
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Re: Swiss Franc Climbs to Record High

well, maybe the Sfr appreciation game is over?
Just in from my ex-colleagues
Quote:
Via Reuters on Wednesday:
RTRS-SNB SAYS CURRENT STRENGTH OF THE SWISS FRANC IS THREATENING DEVELOPMENT OF THE ECONOMY
RTRS-SNB SAYS CURRENT STRENGTH OF THE SWISS FRANC IS INCREASING THE DOWNSIDE RISKS TO PRICE STABILITY IN SWITZERLAND.
RTRS-SNB SAYS THE SNB IS AIMING FOR A THREE-MONTH LIBOR AS CLOSE TO ZERO AS POSSIBLE
RTRS-SNB SAYS IS NARROWING THE TARGET RANGE FOR THE THREE-MONTH LIBOR FROM 0.00-0.75% TO 0.00- 0.25%.
RTRS-SNB SAYS WILL VERY SIGNIFICANTLY INCREASE THE SUPPLY OF LIQUIDITY TO THE SWISS FRANC MONEY MARKET OVER THE NEXT FEW DAYS
RTRS-SNB SAYS INTENDS TO EXPAND BANKS’ SIGHT DEPOSITS AT THE SNB FROM CURRENTLY AROUND CHF 30 BILLION TO CHF 80 BILLION
RTRS-SNB SAYS SNB WILL NO LONGER RENEW REPOS AND SNB BILLS THAT FALL DUE AND WILL REPURCHASE OUTSTANDING SNB BILLS
RTRS-SNB SAYS SINCE THE SNB’S LAST QUARTERLY MONETARY POLICY ASSESSMENT, THE GLOBAL ECONOMIC OUTLOOK HAS WORSENED
RTRS-SNB SAYS AT THE SAME TIME THE APPRECIATION OF THE SWISS FRANC HAS ACCELERATED SHARPLY DURING THE LAST FEW WEEKS.
RTRS-SNB SAYS CONSEQUENTLY, THE OUTLOOK FOR THE SWISS ECONOMY HAS DETERIORATED SUBSTANTIALLY.
RTRS-SNB SAYS KEEPING A CLOSE WATCH ON DEVELOPMENTS ON THE FOREIGN EXCHANGE MARKET
Go euro, go!
(well, sort of...)
bouncing from 1.08 to 1.0945 vs the allmighty swissie

Paul
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  #313  
Old 03.08.2011, 09:38
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Re: Swiss Franc Climbs to Record High

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Old 03.08.2011, 09:48
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Re: Swiss Franc Climbs to Record High

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Effective immediately, the SNB is aiming for a three-month Libor as close to zero as possible, narrowing the target range for the three-month Libor from 0.00–0.75% to 0.00– 0.25%. At the same time, it will very significantly increase the supply of liquidity to the Swiss franc money market over the next few days. It intends to expand banks’ sight deposits at the SNB from currently around CHF 30 billion to CHF 80 billion. Consequently, with immediate effect, the SNB will no longer renew repos and SNB Bills that fall due and will repurchase outstanding SNB Bills, until the desired level of sight deposits has been reached.
Since the SNB’s last quarterly monetary policy assessment, the global economic outlook has worsened. At the same time the appreciation of the Swiss franc has accelerated sharply during the last few weeks. Consequently, the outlook for the Swiss economy has deteriorated substantially.
The SNB is keeping a close watch on developments on the foreign exchange market and will take further measures against the strength of the Swiss franc if necessary.
too little to impact CHF rates in a meaningful way. as expected, the inflationary spigots are being opened. it seems that having gone for the worst option (QE to buy Euros) they're now going for the 2nd worst option...
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Old 03.08.2011, 09:49
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Re: Swiss Franc Climbs to Record High

swiss-franc-climbs-record-high-bigissue.jpg inflation
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Old 03.08.2011, 09:54
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Re: Swiss Franc Climbs to Record High

Euro going down! CHF is going higher than EURO.
Just checked the exchange rate on google,
1 CHF = 0.919 EUR

How much can the SNB do to stop investors from banking on the franc in times of crises?
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Old 03.08.2011, 09:54
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Re: Swiss Franc Climbs to Record High

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It's actually not the Swiss Frank rising, its the Dollar and the Euro collapsing over the years. The Swiss Frank is known to be a very stable currency and that makes it even worse because in times of economic crisis people buy it to not lose too much money.

My dad works at the stocks market. He does not excpect the Euro or the Dollar to raise anytime soon. The dollar will stay low to devalue the federal dept and with the Euro... if some country just mumbles of being out of money soon it drops 0.1 percent. And if Spain, Portugal, Italy, Ireland or any other country has problems like Greece it will drop even below the 1 Frank mark like the U.S. dollar did.
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well, maybe the Sfr appreciation game is over?
Just in from my ex-colleagues


Go euro, go!
(well, sort of...)
bouncing from 1.08 to 1.0945 vs the allmighty swissie

Paul

This bugs me. Is there a risk of Swiss salaries and consumer product prices going down?
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Old 03.08.2011, 10:18
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Re: Swiss Franc Climbs to Record High

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Euro going down! CHF is going higher than EURO.
Just checked the exchange rate on google,
1 CHF = 0.919 EUR

How much can the SNB do to stop investors from banking on the franc in times of crises?
They cant do anything that affects the markets in the medium to longer term, they can only affect some short term outcomes i.e currency controls, rates etc. With currency controls, like the ones they are suggesting, all they do is hurt the people you least want it to hurt and also add even more volatility into the markets. Hence business becomes even more unsure of the future, a disaster if you are looking to grow, expand and take on more labour. But the SNB are under pressure from politicians and the business council to 'do something', because politicians always have to 'do something'. So they will, like lowering rates which they have just done. At the moment it has hardly even reversed yesterdays rally by much, let alone what it will do for whats happened in the last month.

Loose monetary policies were to blame for much of the crisis, and look at what they think is the solution
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Old 03.08.2011, 10:45
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Re: Swiss Franc Climbs to Record High

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well, maybe the Sfr appreciation game is over?
Just in from my ex-colleagues


Go euro, go!
(well, sort of...)
bouncing from 1.08 to 1.0945 vs the allmighty swissie

Paul
Just checked the 3 month LIBOR; does not seem to have changed!
Aiming for close to zero when it is currently only 0.175% is anyway not a big game changer

The CHF improved about 0.02 against the euro this morning but seems to have stabilised now at that level. Really to have a significant effect on the economy the SNB needs to move the CHF by 10 times that.
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Old 03.08.2011, 11:48
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Re: Swiss Franc Climbs to Record High

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They cant do anything that affects the markets in the medium to longer term, they can only affect some short term outcomes i.e currency controls, rates etc. With currency controls, like the ones they are suggesting, all they do is hurt the people you least want it to hurt and also add even more volatility into the markets. Hence business becomes even more unsure of the future, a disaster if you are looking to grow, expand and take on more labour. But the SNB are under pressure from politicians and the business council to 'do something', because politicians always have to 'do something'. So they will, like lowering rates which they have just done. At the moment it has hardly even reversed yesterdays rally by much, let alone what it will do for whats happened in the last month.

Loose monetary policies were to blame for much of the crisis, and look at what they think is the solution

There is a reason why everybody wants the SNB to do something.
It's because any profits (well... 2011 = nada, so far) are divvied up between the Confederation and the Cantons.
And we're not talking pennies.
Just for Canton Ticino we're talking about a figure slightly in excess of Sfr 70m

But still - SNB intervention sort of capsized a speculative boat that was hysterically accumulating Sfr, lately just out of sheer desperation.
The latecomers to the game got burned, whilst the long-term eurosceptics who sold eons ago (e.g. 1.35 ....) are just seeing their profit slightly trimmed.

P.
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