Five months have now passed since the Swiss National Bank (SNB) announced that it was prepared to defend a minimum exchange rate for the euro of 1.20 Swiss francs using unlimited resources. It was certainly because the market had not expected such a bold commitment from such a conservative central bank that the threat was taken so seriously, After all, the SNB had previously intervened to weaken the Swiss franc, but without success. Yet, who could deny the seriousness of the threat: selling unlimited quantities of its own money is theoretically possible if a central bank has the ability to print them. (more...)
Posts Tagged ‘BoJ’
What’s Behind the Swiss Poker Face?
Monday, January 23rd, 2012Fatal Free Lunch
Monday, August 22nd, 2011Japan and Switzerland presently suffer from massive capital inflows, and their respective currencies have appreciated significantly over the past 18 months. Interestingly, commentators have highlighted the rally in the Swiss franc as an indicator of capital outflows from the funding-plagued eurozone, while ignoring the fact that (more...)
