Flight from Euro to CHF

H

Horatio

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It is understood that the Swiss National Bank decoupled from the Euro on 15 Jan 2015 as a preemption to the European Central Bank kicking off quantitative easing as soon as 22 January & also as a preemption to A Greek exit from the Euro.
The decoupling resulted in the exchange rate going from:
1 Euro=1.2 CHF to:
1 Euro=1.05CHF
So the Euro looks cheap & the CHF looks expensive, right?

I reckon that I will move over my Euro into Swiss Franc in anticipation of the Franc increasing as the Quantitative Easing is announced & the Greek elections come.

I'd appreciate to hear the thought of the members on here for this strategy.

Thanks all.
H.
 
If you done this last week, you would seem like a genius now.

But you are taking an exchange gamble by moving out of Euro and no one can forecast the future. It seems to me that you will be just running up unnecessary exchange transaction costs.

Brendan
 
Granted no one can forecast the future, this is understood however we can look at future events & try to understand their effect.

With this in mind, Draghis comments make it look likely that ECB will go into QE & by extension the Euro will fall in value further, if the Greeks proceed to exit the Euro leaving a trail of debt in their wake the Euro will likely fall even further in value.

Would you agree that the above scenario on Euro value is correct if the QE & the Grexit come to pass?
 
Hi Horatio

My opinion on these issue is no better than the combined market opinion which is expressed in the current euro CHF exchange rate. Better informed minds than mine, have been working on this since Monday and have taken into account all the factors you have outlined, to determine the current exchange rate.

You are taking a punt - sorry unfortunate choice of words. You are speculating on currency. Sometimes you will be right. Sometimes you will be wrong. Every time, you will pay fees for placing your bet.

There is a great article in yesterday's FT about the huge profits being made by the currency trading platforms from amateur currency traders.

Brendan
 
I have covered this question on my blog which includes a link to my short conversation with Conor Brophy on Morning Ireland on Friday

[broken link removed]
 
Horatio said:
It is understood that the Swiss National Bank decoupled from the Euro on 15 Jan 2015 as a preemption to the European Central Bank kicking off quantitative easing as soon as 22 January & also as a preemption to A Greek exit from the Euro.
Click to expand...

You misunderstand the objective of the SNB and what their likely next move may be, they have already given a hint... Their objective is to push the Franc down and although they lost 60b last week it should be remembered that they still have over 500b in reserve which they can deploy. One could get badly burned betting on the Franc right now.
 
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