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Global Macro Trading Journal
- Thread starter Daal
- Start date
Erm, have you been to Switzerland, Daal? I assure you that it does make a difference and the SNB is worried (and so is the Banco Central do Brasil, as I understand it)... However, it's being counteracted currently by another factor, but I expect the influence of that to fall.Quote from Daal:
I dont think it should make a significant difference. Just look at the brazilian real
Quote from Martinghoul:
Erm, have you been to Switzerland, Daal? I assure you that it does make a difference... However, it's being counteracted currently by another factor, but I expect the influence of that to fall.
ok I'll bite,
what is being counteracted?
and what is that "other factor" ?
Don't know very specific economics behind swiss, but logic says that when SNB thought it proper to defend 1.50 because it was affecting the competitiveness of the economy, defending 1.10 definitely should make a difference to the economy.
The question is only a bullock will try intervening at this moment. This is not a Swiss problem right now, the ripples have been caused by US ratings cut expectations, and people dumping euro to buy chf. I am positive that SNB can't do anything real other than observation from sidelines with pure agony. Had it been Japan central bank, they could have acted, imho.
The question is only a bullock will try intervening at this moment. This is not a Swiss problem right now, the ripples have been caused by US ratings cut expectations, and people dumping euro to buy chf. I am positive that SNB can't do anything real other than observation from sidelines with pure agony. Had it been Japan central bank, they could have acted, imho.
Quote from Martinghoul:
Erm, have you been to Switzerland, Daal? I assure you that it does make a difference and the SNB is worried (and so is the Banco Central do Brasil, as I understand it)... However, it's being counteracted currently by another factor, but I expect the influence of that to fall.
What I mean is that the intervention only will have a short-term impact of wiping out oanda pikers. The currency will keep going where its supposed to
The SNB still has its tail between its legs from last year's intervention losses (which continue to accumulate). Like a trader who can't bear to take another loss, the SNB might only intervene when it feels 100% chance of success - which might never happen.
As I understand it, the SNB is somewhat more answerable to investors than other central banks. They just can't do what they want and then give the middle finger to those who would question (the way Bernanke, Dudley, et al do).
As I understand it, the SNB is somewhat more answerable to investors than other central banks. They just can't do what they want and then give the middle finger to those who would question (the way Bernanke, Dudley, et al do).
Quote from Daal:
What I mean is that the intervention only will have a short-term impact of wiping out oanda pikers. The currency will keep going where its supposed to
Where is it supposed to go ? Daal, do you have a target range in mind ?
It seems to me that this move from 1.50 to 1.10 for EURCHF which started in 2009 and is still continuing has more to do with euro-zone worries rather than any swiss economic outperformance compared to eurozone (read german) economic state.
So, I personally think setting a target on eurchf is akin to having a clear view on how eurozone plays out over the next 2-3 years.
Quote from gmst:
Where is it supposed to go ? Daal, do you have a target range in mind ?
It seems to me that this move from 1.50 to 1.10 for EURCHF which started in 2009 and is still continuing has more to do with euro-zone worries rather than any swiss economic outperformance compared to eurozone (read german) economic state.
So, I personally think setting a target on eurchf is akin to having a clear view on how eurozone plays out over the next 2-3 years.
I'm using instinct on this trade and don't have a very scientific basis. I plan to remain short EUR against CHF/JPY and USD till there currency is dropping like crazy and everybody thinks the EUR is over, headlines are all over the newspapers etc. There might be a short-term bounce but I'm not sure the EUR fall is over yet
Well, they are somewhat more accountable, but not in the realm of monetary policy, that's for sure. The only bit that matters is the actual reported "mark-to-mkt" losses and those only matter because the cantons got so used to regular payments from the SNB. Now that the SNB isn't making money (and losing it, in fact), the cantons have lost a source of revenue that they used to take for granted and they're not too happy. However, there's no questioning of the SNB independence so far.Quote from ralph00:
The SNB still has its tail between its legs from last year's intervention losses (which continue to accumulate). Like a trader who can't bear to take another loss, the SNB might only intervene when it feels 100% chance of success - which might never happen.
As I understand it, the SNB is somewhat more answerable to investors than other central banks. They just can't do what they want and then give the middle finger to those who would question (the way Bernanke, Dudley, et al do).
Sure, I agree that this isn't something an intervention can solve. I am talking about proper capital controls, where you cannot buy Swiss currency or your Swiss deposits get taxed or something.Quote from Daal:
What I mean is that the intervention only will have a short-term impact of wiping out oanda pikers. The currency will keep going where its supposed to
Quote from ralph00:
The SNB still has its tail between its legs from last year's intervention losses (which continue to accumulate). Like a trader who can't bear to take another loss, the SNB might only intervene when it feels 100% chance of success - which might never happen.
As I understand it, the SNB is somewhat more answerable to investors than other central banks. They just can't do what they want and then give the middle finger to those who would question (the way Bernanke, Dudley, et al do).
Agree with this.... also they don't have the chops for a full on fight with intervention ... the chips have been stacked on this trade for a while and to fight it wouldn't result in much beyond giving the powers that be a better place to short Eur/Chf