Thursday, August 11, 2011

Swiss franc peg - another try at control

SNB has stated that a peg against the euro would be legal. The Swiss want to lower their exchange rate especially against their nearest neighbor. In fact, Swiss is surrounded by the eurozone. While this may make sense, it may be hard to achieve. It also ties CHF with a weak uncertain currency. One of the only reasons is that trying to move the CHF/USD does not make sense if you trade with Europe and your most frequent visitors are from Europe.

Te only way for the CHF to deprecate is if the rest of the world starts to behave.

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