Should i buy swiss francs 2011

Live in a glass-walled home. Millennials squeezed out of buying a home. Big Data knows you're sick, tired and depressed. Your car is a giant computer - and it can be hacked. Ford Motor Co. Advanced Micro Devic Cisco Systems Inc. On 15 January, the Swiss National Bank discontinued its currency ceiling, set at 1. The Swiss franc CHF appreciated immediately, reaching as much as 0.

The increasing demand for Swiss francs led to its appreciation: from CHF1. This made Swiss goods and services more expensive and less competitive than those of other countries.

As can be seen in figure 1, maintaining the ceiling enabled the franc-euro exchange rate to be held steady for more than three years, whereas the effect of abandoning it has been immediate and significant. In combination, all these factors are likely to spur once again a search for safe havens, leading investors to buy more Swiss francs. In this context, to keep the ceiling on its currency, the SNB would have to intervene further as it has done since , leading to further growth of its balance sheet.

Investors on the Swiss stock market reacted immediately, with the main index falling dramatically that day. Additionally, it will expose the SNB to sizeable losses on its assets , since a predominant part of them is denominated in euros.

In some Member States however, the decision raised more concerns, since it affected not only the private sector but also a number of households which had contracted CHF-denominated loans with the aim of benefitting from low Swiss interest rates:. The surprise decision taken by the SNB to discontinue its exchange rate ceiling had short and medium-term consequences, not only for Switzerland but also for the EU.

Some of them the impact on the Swiss stock exchange and western European financial intermediaries were immediate although damage was limited, but some others loss in competitiveness and reduced tourism for Switzerland, potential increase of non-performing loans in central and southern Europe may have longer term consequences. I have read a few just right stuff here.

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Keith Pilbeam , Author provided How we got here In September the Swiss National Bank was worried about the implications of the ever-strengthening franc for the economy, and its exporters indicated that it would not tolerate a rate below 1. When a market explodes The movements show what can happen when a rigged market finally blows up. License and Republishing. Written by.

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At the time, the bank said it considers the franc to be "massively overvalued," and that its strength "is threatening the development of the economy and increasing the downside risks to price stability in Switzerland. Not that much has changed. The currency is still very strong, but the brief weakness in August might have given the central bank pause. The Swiss National Bank "still has plenty of options" to control appreciation, Dolan said. The bank could levy a tax on foreign deposits, making it more expensive for investors to hold francs.

Or the bank could move to negative interest rates. Click chart to track currencies.