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Unprecedented 500 Pip Move In EURCHF As Emergency Talks Between SNB And Exporters Lead To No Results
One of the least discussed stories in the past week has been the unprecedented move in the EURCHF, which after approaching fresh all time lows as recently as Monday has moved by a massive 500 pips in under 5 days! This is a gargantuan move in the highly leveraged FX world, and demonstrates just how seriously the strong CHF is hurting Switzerland. To that effect we are now hearing of yet more attempts by the Swiss government and SNB to talk down the franc, after an earlier headline noted that the authorities see persistent CHF strength as posing risks. In fact things in Switzerland have gone so far that there have been emergency talks between the SNB and the country export lobby regarding the CHF, which however has not brought about any results. And while (now not so) recent failed attempts by the SNB to intervene had no impact on the currency at all, we are now witnessing the last bullet left in the FX warfare arsenal: talking down the growth prospects of one's own country, which is what Philipp Hildebrand has been reduced to doing to kill his currency. We expect this week's unprecedented move to create great short entry points for the pair, as the European contagion reappears as soon as next week, when even a global central bank backstop effort has been priced in.
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would you repeat the same analysis as well for the EURNOK pair. Just look at the chart
OUCH!!!
Solution: start handing out free shit to everyone, in the best socialist tradition.
Thank God I found this place. I'm so happy to be surrounded by my like minded brothers! Blessings all around! PALIN 2012!
Maybe not so much.
How, in French/Italian/German do you say, "Borrow, bitchezzz!"
They can't win the race to the bottom unless they print. Duh.
In German: Leihet, Sauen Germans prefer sows over bitches...
Friendly Country...in warfare times)
what was their slogan again during WOII?
WE BUY GOLD DENTAL FILLING AT THE BEST MARKET PRICE!
+ a Trillion Oz.'s of Gold!
I can see little that the SNB can do to curb the appreciation of the franc . FX interventions are costly and seem to have little or no lasting impact beyond the short term .
They have plenty of bullets left...just monetize the hell out of everyones currency....that was the true japanese miracle. The chinese got it figured out now.
They are gonna have to dump some gold if they want a weaker CHF
That has to be the plan....but watch for a coordinated effort that appears coincidental
Thete is no cost to fx transactions in newly printed sovereign fiat...qe swiss style.....well....there might be a later cost if the ponzi unravels.....but if the piss ant madoff could make it thirty years, surely a sophisticated first world government could do much better.
I Like You!
Hmmm...buy up some CHF...wait for the intervention, sell some of them, hold some for debt armageddon insurance (and they have such pretty notes).
How are those yodelers doing with all that foreign CHF-denominated debt (Hungary etc)?
The tops in on silver....get out now! Dont lose everything! Remember pigs get slaughtered......u heard it first from the troll.....sorry! Couldnt resist! Been trying to hold back.
now your just stirring the pot, bless your heart...
SNB can simply print secretly some CHF and give it to me. I'll spent it immediately in some EUR country buying silver coins. Then I store that coins in Switzerland. If CHF should fall to sharply, I sell them buying CHF, then SNB burns then "my" CHF secretly.
But Mr. Hildebrand doesn't trust me! Here we come to the point - systematic lack of trust is a problem :-) Creative people with brilliant solutions can not get their work done. I'm really deeply frustrated and upset. Please don't call me back.
This forex stuff is so confusing.
EURUSD shows how many dollars it takes to buy a euro. When EURUSD goes up, it takes more dollars to buy a euro. Ok, got that.
To be consistent I would expect EURCHF to show how many swiss francs it takes to buy a euro. But it seems to work the opposite way. This article appears to say the swiss franc is rising against the euro, which in my understanding would show a descending line on the chart (fewer swiss francs needed to buy a euro), but the line is going up, not down.
I'm totally confused.
And don't even ask me about the dollar carry trade, its way over my head.
Au / Ag seem so simple compared to all this forex stuff :)
The article is actually saying that the Euro had been sinking pretty heavily against the Swiss franc (CHF...) and their central banker, Mr. Hildebrand, is in a world of shit because Swiss stuff costs too much and exports are suffering big-time.
So the Boyz got together recently and thought of ways to stop the Euro from plunging against the CHieF further. On that news, the Euro gained 500-pips almost overnight, which is a big move in 4X.
Unfortunately, the Boyz couldn't come up with anything, so it may be back into the tank for the EURCHF.
It's really pretty simple.
:D
PS Once you go 4X, you never go back.
PPS The carry trade is pretty simple, too. You just buy a currency that pays a higher interest rate than the money you're buying it with. The overnight difference is the "carry" and interest is paid to your account. Only the big, big money can really do it because the interest is measured in pennies.
The EUR has improved against CHF and USD. Recently. I think the point of the post is that this will create a good entry point to short EUR, as the crisis will worsen again soon.
Ok, thanks Orly and Captain Kirk, that explains it. EUR jumped up against CHF and may well fall back down, hence the short opportunity. Got it.
What amazes me is how such a large bogus move can occur on what amounts to rumors about trying to weaken CHF when no real results occurred. That's pretty wild. No wonder people get killed in forex trading. It all runs on rumors it seems.
If I may also say that, normally and in general, 4X is the last thing to run on rumor. Many 4X trends go on for years at a time in a normal market situation. Most of the time, positions are taken using interest rates (more specifically, the difference between one nation's interest rate and the other- the rate spread...) and rates don't just jump all over the place- normally.
For instance, traders may be betting that country A will likely lower interest rates and thus pay less overnight interest. That usually would mean that country A's currency is likely to go down. Keep in mind, too, that home-gamer 4X traders are just following around the big money who have an interest in interest rates and make money off the carry.
In normal times, these things take years to develop and judgments are made along fundamental, economic thinking. That's what really makes 4X so great is that it takes years for this stuff to unfold and a good trader can ride the gravy train all the way up or all the way down.
Unfortunately, now we have a situation where 4X trading is based on "risk on/risk off" models. Now, we get to innuendo, through back-room winks and nods, moving the currency markets. It won't be like that forever. In fact, I don't think it will be like that much longer: maybe another eight to twelve months.
The large recent move is due to the fact that the short EUR trade is incredibly crowded. Short term money is fickle.
Do the Swiss have their financial house in order? Probably. That is why their currency is strong. No good deed goes unpunished.
Can it stay in order with near-zero exports is the operative question. And the Swiss government and banks may not have the same bill of health.
I'm sorry, I started throwing up in my mouth about here...
what the swiss need to do is make the euro go away entirely .In other words, they need to make it so dangerous to hold a Euro it becomes worthless, end of exporting problem as no one will be willing to receive Euros as payment even in the EU .1 benefit would be they dont have to print against it (nobody wants currency from zimbabwe ). A way they could do this is by stating they will no longer accept any EU denominated paper. If they claim a total loss of faith in the euro others may follow as well .