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The Swiss Franc Is Getting Crushed
The early bid for Swiss Francs following the Greek election results has turned into a bloodbath of outflows as EURCHF has swung a huge 230 pips overnight with Swissy now at its weakest to the Euro since before QECB leaks last Wednesday... One wonders if the SNB is back in the game?
Is the SNB back in the game?
While Spot FX is unch from midweek, the yield curve remains drastically lower...
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Get back in there and turn those machines on.
you can't sell our seats. a duke has been sitting on this exchange since it was founded... [/mortimer]
It was all because of this awful negro....
Hot QE cash is a wonderful thing.
meh
Wake me when it gets back near the 1.20 peg from a couple weeks ago...
Wow!
We didn't need to wait very long...
Sadly, nobody took me up on my wager for a fondue dinner for two on Lake Geneva.
and about that "pay raise" for all the Swiss workers that the peanut gallery was touting...
BTW - the RENT IS STILL TOO DAMN HIGH! (along with groceries, health insurance, and all the other necessities which all happen to be denominated in CHF, but luxury Spring Breaks in the Greek Isles for the rentier class are looking cheap...)
More work for same pay: firms tackle high franc
Published: 26 Jan 2015 10:48 GMT+01:00
Responding to the surge in the value of the Swiss franc, certain companies in Switzerland are asking their employees to work longer hours without any extra pay.
Peter Spuhler, the head of manufacturing company Stadler Rail, has proposed that workers put in two hours a week extra unpaid.
The proposal is just one way Swiss companies, particularly those in the exporting business, are responding to the high franc.
Employees would be ready to accept a long work week without extra pay “if it is a temporary measure,” Spuhler told the SonntagsZeitung newspaper.
But the Stadler Rail boss said it would be a mistake to cut wages because now is not the time to reduce the purchasing power of Swiss workers.
The franc was trading above the euro on Monday in the wake of the Swiss National Bank’s decision earlier this month to abandon a policy of pegging the Swiss currency to a level of 1.20 against the euro.
A strong franc makes the cost of Swiss goods more expensive to foreign customers.
Spuhler noted his company had already made cost-saving measures to adjust from several years ago when the euro was worth more than 1.50 francs.
“Most companies have thought in the last few days about a hiring freeze and many have already imposed it,” Hans Hess, president of industrial group Swissmem, told SonntagsZeitung.
Swissmem is an association representing engineering, electrical and metal companies that employ 330,000 people and whose products accounted for almost a third of Swiss exports in 2013 with a value of 65 billion francs.
Other companies have already applied to cantonal employment offices to implement short-time working arrangements (Kurzarbeit), which involve reduced working hours to avoid layoffs.
Under such arrangements, the employment offices subsidize pay.
Business groups are calling for a relaxation of conditions to allow such deals on a temporary basis.
Other business leaders are asking the Swiss government to cut taxes and reduce government bureaucracy.
Hans Grunder, a Conservative Democratic Party member from the canton of Bern, is advocating the abolition of sales tax on tourism services and restaurant food for a year.
“The situation is very dramatic,” Grunde told the Schweiz am Sonntag newspaper.
“Swiss tourism and gastronomy has in one fell swoop become twice as expensive as abroad.”
Grunder said such a tax holiday would cost the government 800 million francs a year but it would send a “huge signal” to tourists.
http://www.thelocal.ch/20150126/more-work-for-same-pay-firms-tackle-high...
Austrian thought always prevails in the end. It might be preceded by a Keynesian detour but it always gets there in the end.
It's not a Keynesian detour. The problem is the peanut gallery loves to talk about "Austrian economics", but they don't really understand it (or any other school of dismal science though AFAICT). Local wages will fall faster than local consumer prices, there is nothing in Austrian economics that posits otherwise, unless there is some secret Marxist-Kumbayah-NeoLiberal-Austrian clique I am not familiar with that argues for-profit corporations will place misapplied economic theory above their own economic interests. Furthermore, the cost of offsetting subsidies (Kurzarbeit and a Tourism Tax holiday) will be paid for by local taxpayers, either now through higher taxes, or later by borrowing now and running deficits.
This relatively tiny move seems pretty dead-cat-bouncey to me.
But King Dollar will trash ALL currencies over the next few years, including the Swissy, so I can't disagree with your premise. The chart in question here is denominated in Euros and I can't see the Euro becoming much stronger relative to the Swiss Franc anytime soon.
Presumably you are lumping the GBP with King Dollar. I'm not clear on your logic there.
I thought that until I went back and read this:
http://www.bloomberg.com/news/2014-07-04/u-s-seen-as-biggest-oil-produce...
Fuck Bloomberg, but anyway the fact remains: we are producing more oil than Saudi Arabia right now. And it's way more expensive. Not a single fracker is going to make money. And the stronger dollar makes that oil even less competitive. Basically, no one has gotten the clue yet that America should be treated like one of these oil exporters like Russia, Venezuela, etc. that are going through currency crises right now. In the summer, we're going to get hammer punched in the thorax. Currency crisis this summer. That's my call. I moved everything I had, pretty much, from cash to gold today. Just my luck it'll drop again.
They don't call it "King Dollar" for nothing. The oil trade is a rounding error on the total global dollar investment and trade flows. All other currencies will collapse before the King does.
The special arrangement between the UK and USA is even older than Bretton Woods and as new as the most recent currency swap.
Doesn't the SNB have some losing positions they need to net out?
Randolph collapses with a massive heart attack
-Mortimer, your brother is not well, we better call an ambulance!
-Fuck him! Now you listen to me, I want trade reopened right now! Get those brokers back in here! Turn those machines back on! Turn those machines back ooooon!
Nahh.. I think it's moar like a sure sign of how limited the ECB QE really is as ZH explained here last week:
http://www.zerohedge.com/news/2015-01-22/here-are-negatives-todays-ecb-q...
This is NOT good for stawks BTW
headbanger, don't spoil the narrative. the ECB QE is unlimited. limitless. no limits whatsoever. a great tide that will lift all boats! /S
meanwhile, I see the boyz have a new ball to play with, but are not sure if the owner of that ball is being fair.... sniff
Oh... I feel so dirty now..
Personally, I would check the air pressure of that new ball.
Burnt once, etc.
I give up.
Say, when's my gold gonna start paying interest?
Given that most sovereign debt is negative nothing is actually receiving something in this crazy world we live in.
Price tied to risk? Nevar.
well if it's any consolation, I'm 'interested'
The other guys are at negative rates. your gold is zero? Sounds like an ok deal to me.
Maybe I'm mistaken and Buffett can explain it to me.
it is today negative just like our saving accounts rothlmao
All the Polish people who have Swiss Franc-denominated mortgages will be so happy.
How much CHFs do the Polish have in reserves?
Not much
so will the women who won't have to sell themselves like in Greece to pay their bills.
oh man, and here i went and bet the farm that there would be no more shenanigans. /s
The currency war is more unpredictable and loads more fun than I had originally envisioned. I've run out of popcorn - be right back :-)
I was naive and traded currencies years ago (small basis) and thought I could actually read charts and figure out patterns and such. Then I researched the price history of different brokers and found that the price differed greatly among the brokers.
Think of it as a huge broom that each broker utilizes to sniff out stop losses and such. Then every once in a while each currency pair would swing wildly in one direction or the other just to make sure nobody was getting cute.
Then one day the USA outlawed hedging in currencies (going long and short at the same time) surely because there were strategies out there making money with it. I grew up a lot that day.
John 3:16
Can you elaborate a little more on this? I have a pretty good stack of rubles from travel, and have bought some recently with the decimation of it. To me, the long history of the ruble, and the fact that Russia has a lot of natural resources, seems that going long stands a chance of a good hedge against the dollar bubble.
I believe in PM's, and have done myself a peace of mind with them, as well... but, I question if my thoughts on going long the ruble, are good?
it's all to crush the shorts these markets are so unpredictable. have to wonder when the shit will hit the fan and this killer economy will not be able to see the manipulators do thier thing. give me MOAR now
This "proves" that Greece is not important and the Euro is a great currency.
Very convenient timing.
Or is the "market" anticipating an exit of Greece from the Eurozone, leading to a stronger Euro because of one weak economy less?
Deaths have been caused by sneezes.
Weebles wobble till they all fall down.
"you will do as you are told, until the rights to you are sold"
- Zappa
The SNB is simply supporting the Euro at 1.10 instead of 1.20 in light of the expansion of ECB's balance sheet. As planned.
ECB payback is a bitch.
Then why do all of this in the first place?!
Central Bankers position available: brain is optional, apply within.
The Empire Strikes Back TM
Says it all in 6 minutes...
https://www.youtube.com/watch?v=STCgdoulOw0&x-yt-cl=84503534&x-yt-ts=1421914688
Fun Rant..., guy needs another Red Bull
..., guy needs another Red Bull...................and a baseball bat
Mario Drag-Queen?
Lmao!
And gold price suppression back in action.
Meh, just the pre 1st notice day squeeze
The EURCHF pair is at 1.01 but it was already higher back a few days ago. In Swiss media they are saying the SNB has been active but then again the EURUSD also appreciated albeit less strongly and considering that some investors were particularly betting on chaos after the Greek election with an uncertain outcome it may well be that they are somewhat disappointed that the coalition seems already set. We shall see...(Now that the ponzies left Davos it's ok if the franc falls again, they spent their bucks :D)
lol, I knew that the peg is a sexy thingie that makes explicit a trend which is implicit and loves to stay hidden.
Thats the whole psychology of sexual desire that the currency (or any other) market is supposed to incarnate.
Whence the butt bashing every time a peg sticks its family jewels out in the open.
The subtlety of market is to prefer implicit to explicit as the market is like an insatiable queen running from pillar to post for her daily hope of orgasm.
If you understand Jezebel you understand the market belle that rings your death knell.
So....after a 4000 plus pip down few days ago you guys have the nerves to come here and talk about a 230 pip move as "bloodbath" !! ZH seems to never get FOREX !! : ) )
The New World Order banksters are trying to punish the Swiss for stepping out of line.
Do or do not, there is no try....Yoda
Gold and dollar seem to be tracking each other.wtf?
Happens from time to time Gold will fall soon enough.
Sell the EUR/CHF rallies. Easy money!! http://otdon.blogspot.co.uk/2015/01/europe-behind-lines.html
Smells like SNB intervention, but may also include a push from Interactive Brokers' warning to clients that holding positive CHF balances will incur a negative rate starting in Feb.