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View Poll Results: How long will the CHF peg hold?
Less than a day 1 0.64%
Less than a week 17 10.90%
Less than a month 24 15.38%
Until the end of the year 43 27.56%
Longer 71 45.51%
Voters: 156. You may not vote on this poll

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  #1361  
Old 07.09.2017, 09:00
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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1 eur =1.13999 chf

How likely is a new pegging of the franc to the euro?
Why do you foresee that? The previous cap was an attempt by the SNB to limit the strength of the franc against the euro. The franc has now weakened against the euro:

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So CHF1.0721 to the EUR...
That was posted on 17.11.2016; ten months ago....

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1 eur =1.13999 chf
... and here we are today.
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  #1362  
Old 07.09.2017, 09:05
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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1 eur =1.13999 chf

How likely is a new pegging of the franc to the euro?
#1: it was never pegged (there was a ceiling/floor, fundamental difference!)
#2: as long as it's moving this way, no new interference is likely OR it is already happening without being publicly announced
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  #1363  
Old 07.09.2017, 09:25
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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Why do you foresee that?
I don't foresee it and I did not say that I did! I merely asked how likely it was!
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  #1364  
Old 07.09.2017, 09:28
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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I don't foresee it and I did not say that I did! I merely asked how likely it was!
Very close to zero chance. Manipulating the markets is expensive & with a huge risk of financial loss over time. Interesting to see what happens when the SNB start to unwind their positions.
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  #1365  
Old 07.09.2017, 09:34
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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OR it is already happening without being publicly announced
So basically they are still buying euros 'behind the scenes'?!

I have noticed that GBP is also quite low now against the franc.
1 GBP =1.24724 CHF
Due to its own general weakness or the strength/overvaluation of the franc? Can't the SNB buy GBP instead?
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  #1366  
Old 07.09.2017, 09:44
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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So basically they are still buying euros 'behind the scenes'?!
Yes, and everyone can check if they do or not:

The SNB has to publish their positions in certain intervals (not sure if it's monthly or quarterly(?), but in principle they do.).

So you can check out the Delta in their EUR-positions, other EUR holdings and holdings in general.

Apparently they buy EUR behind the scenes and then change them into EUR stocks and other assets.

As they don't have to publish each and every transaction it's hard to say what they do exactly, but each time they publish their positions analysts flood in to "reverse engineer", interpreting what they think must've happened.
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  #1367  
Old 07.09.2017, 09:59
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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So basically they are still buying euros 'behind the scenes'?!

I have noticed that GBP is also quite low now against the franc.
1 GBP =1.24724 CHF
Due to its own general weakness or the strength/overvaluation of the franc? Can't the SNB buy GBP instead?
Why would they buy GBP?

The vast majority of Swiss trade is with the euro zone. They have much less need for stability against the pound.

The pound is low against the euro - the relationship to the franc is a second order effect.
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  #1368  
Old 07.09.2017, 10:03
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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Why would they buy GBP?...
Such interpretations are overestimating the international effect/importance of the CHF.

The CHF cannot (significantly) influence EUR/GBP EUR/USD or any other currencypair outside of CHF/XXX.

The CHF is mainly going up and down against all other currencies, simply due to its (relative) low overall volume.
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  #1369  
Old 07.09.2017, 10:13
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Re: SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

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Such interpretations are overestimating the international effect/importance of the CHF.

The CHF cannot (significantly) influence EUR/GBP EUR/USD or any other currencypair outside of CHF/XXX.

The CHF is mainly going up and down against all other currencies, simply due to its (relative) low overall volume.
I didn't say it could - in fact I specifically said the opposite.

"The pound is low against the euro - the relationship to the franc is a second order effect."

The last statement is not true - the fluctuation is not random, it is due to the perceived relative strength of CHF vs other currencies. The volume does affect the volatility, and the feasibility of the SNB managing it, but not the direction of movement.
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