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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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  #1  
Old 06.09.2011, 11:10
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SNB Pegs CHF to the EUR!!! [and the aftermath of the removal of the cap]

The Swiss National Bank has said it will peg the Swiss Franc to the Euro at 1.20!

Because the CHF is such a shallow currency that effectively mean the Swiss National Bank will have to print this money to do it.

So much for being the safe haven currency of the world! They have pegged themselves to a sinking ship...
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  #2  
Old 06.09.2011, 11:12
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Re: SNB Pegs CHF to the EUR!!!

Oh dear! We are heading for inflation and higher taxes, just like the bad old gold standard days.

http://www.snb.ch/en/mmr/reference/p...0110906.en.pdf

Swiss National Bank sets minimum exchange rate at CHF 1.20 per euro

The current massive overvaluation of the Swiss franc poses an acute threat to the Swiss
economy and carries the risk of a deflationary development.
The Swiss National Bank (SNB) is therefore aiming for a substantial and sustained
weakening of the Swiss franc. With immediate effect, it will no longer tolerate a EUR/CHF
exchange rate below the minimum rate of CHF 1.20. The SNB will enforce this minimum
rate with the utmost determination and is prepared to buy foreign currency in unlimited
quantities.
Even at a rate of CHF 1.20 per euro, the Swiss franc is still high and should continue to
weaken over time. If the economic outlook and deflationary risks so require, the SNB will
take further measures.

.

Last edited by Ittigen; 06.09.2011 at 19:42.
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  #3  
Old 06.09.2011, 11:16
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Re: SNB Pegs CHF to the EUR!!!

Another example of politics and markets. Dear old Norman Lamont thought he was bigger than the markets and look where it got him.
I reckon fx traders across the world are looking for a new place to play and the SNB are just about to find out by how much.........
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Old 06.09.2011, 11:24
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Re: SNB Pegs CHF to the EUR!!!

Chf loses 7.5 pct against the euro......... how about a cheeky sell euro buy swiss at say 1.25 when it gets a bit over done? any thoughts?
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  #5  
Old 06.09.2011, 11:26
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Re: SNB Pegs CHF to the EUR!!!

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Oh dear! We are heading for inflation and higher taxes
When has that not been the case... here or elsewhere?

(thanks for posting the link- lazy Zuger!)
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  #6  
Old 06.09.2011, 11:26
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Re: SNB Pegs CHF to the EUR!!!

I was only joking
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Old 06.09.2011, 11:28
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Re: SNB Pegs CHF to the EUR!!!

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Chf loses 7.5 pct against the euro......... how about a cheeky sell euro buy swiss at say 1.25 when it gets a bit over done? any thoughts?
Yes, do it if you can get it in. I was too late trying to get in at 1.17. Thought I could arb it quickly. Then gold dropped 3% and I decided to wait till things calmed down. Its weird that Gold is selling off hard in this.
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Old 06.09.2011, 11:29
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Re: SNB Pegs CHF to the EUR!!!

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When has that not been the case... here or elsewhere?

(thanks for posting the link- lazy Zuger!)
Was there a link? I got a call from my broker. Cant post that.
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Old 06.09.2011, 11:29
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Re: SNB Pegs CHF to the EUR!!!

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Chf loses 7.5 pct against the euro......... how about a cheeky sell euro buy swiss at say 1.25 when it gets a bit over done? any thoughts?
The big money went in when the rumour surfaced a couple of weeks back that a peg will be done at 1.15... predicting the future never pays off... buying the rumour almost always pays off
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  #10  
Old 06.09.2011, 11:32
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Re: SNB Pegs CHF to the EUR!!!

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The big money went in when the rumour surfaced a couple of weeks back that a peg will be done at 1.15... predicting the future never pays off... buying the rumour almost always pays off
as long as you remember to sell the fact afterwards!

Happy days for swiss employers even if it doesnt last for ever. At least this months overheads will be 10 pct cheaper
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  #11  
Old 06.09.2011, 11:37
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Re: SNB Pegs CHF to the EUR!!!

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Oh dear! We are heading for inflation and higher taxes, just like the bad old gold standard days.
Was the alternative any better?
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  #12  
Old 06.09.2011, 11:37
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Re: SNB Pegs CHF to the EUR!!!

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as long as you remember to sell the fact afterwards!
My belief is that it should be at least 1.3 so I'm selling that all day long (theoratically lol)
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Old 06.09.2011, 11:40
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Re: SNB Pegs CHF to the EUR!!!

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Yes, do it if you can get it in. I was too late trying to get in at 1.17. Thought I could arb it quickly. Then gold dropped 3% and I decided to wait till things calmed down. Its weird that Gold is selling off hard in this.
Its back at $1906/oz for now, probably as money leaves SFr as its 'safe' status is now officially over. Oh well, back to gold for me.
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  #14  
Old 06.09.2011, 11:45
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Re: SNB Pegs CHF to the EUR!!!

Where's Soros when we need him?
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Old 06.09.2011, 11:46
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Re: SNB Pegs CHF to the EUR!!!

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Where's Soros when we need him?
Busy counting his US Treasuries...
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Old 06.09.2011, 11:47
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Re: SNB Pegs CHF to the EUR!!!

Any idea as to why the peg was chosen at 1.2?

My guess is that the decision to announce the peg right before 7 September (on which the fate of the EUR will be decided by the Germans) was not accidental. The SNB's choice of 1.2 reflects their belief on this matter - they already have huge bets on the EUR, they can't possibly contemplate it dying anyway.


Rather ironic that Patrick Odier (head of the Swiss Bankers' Association) had only come out yesterday to indicate disapproval of a EURCHF peg on Bloomberg.

Other foxes had lost their tails, so the SNB decided to cut its tail off too.

Goodbye CHF!
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  #17  
Old 06.09.2011, 11:50
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Re: SNB Pegs CHF to the EUR!!!

Is there a groan button on this forum for the SNB?

Any predictions for the Swiss inflation rate this time next year, after bad news about Italy, Spain or Greece?
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Old 06.09.2011, 11:50
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Re: SNB Pegs CHF to the EUR!!!

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Any idea as to why the peg was chosen at 1.2?
Just a line in the sand I guess... it's just a minimum they want to see it even weaker...
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Old 06.09.2011, 11:51
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Re: SNB Pegs CHF to the EUR!!!

Not sure where this is going, but it seems like a very brash move on behalf of Hildebrand. No doubt he had political support, but it could lead to a very nasty rise in inflation here in a matter of weeks before the markets settle again. I have to say I'm not impressed, there were many other (less radical) options including the waiving of VAT on imports for export oriented businesses that wouldn't have affected every member of the population like this sweeping one-sided act. I'm trying to find a suitable cliché, but atom bomb to crack a nut seems appropriate.
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Old 06.09.2011, 11:52
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Re: SNB Pegs CHF to the EUR!!!

I can't wait to see Wollishofners take on this

Edit: This is my 1000th post lol

Last edited by The_Love_Doctor; 06.09.2011 at 14:00.
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