The franc will probably stay expensive long The Swiss currency exchange rate is distributed upward against the euro after the European Central Bank action Thursday. The franc should remain strong over the coming months. The Swiss franc has continued to appreciate against the euro Friday. He played again around 0.98 francs to 1 euro, as had been the case 10 days ago when the Swiss National Bank (SNB) had lifted suddenly, completely unexpectedly, its exchange rate floor (1 Br. 20 for 1 euro). The amount of the assets of the European Central Bank (ECB) repurchase program detailed yesterday, corresponded to expectations. The 1140 billion euros (1118 billion francs) that will at least inject the ECB in the European economy to relaunch and create inflation were already largely integrated by the market, which had contributed to the appreciation of the franc against the euro these days. Despite this, the European currency continues to plunge, to the point that Credit Switzerland economists argue in a note that the franc will remain strong against the euro, at least some time, and could even further to appreciate. It is so far removed from the rate of change tolerable for Swiss companies to 1 CHF 10 for 1 euro, advanced by Eveline Widmer-Schlumpf, Federal Councillor in charge of finance, in the aftermath of the SNB decision to do away with the anchor to the euro. It is also this same exchange rate 1 CHF 10 which delimits the threshold below which a continuation of the appreciation of the franc would worsen drastically the Switzerland economic prospects, had indicated his subordinate Serge Gaillard, Director of the Federal Finance. Therefore, advance Credit Switzerland, the Swiss National Bank will have to be much more active on the foreign exchange market as she does had thought it, to prevent the franc continue to grow too. But now stripped of the floor rate, the SNB may decide freely the threshold from which it operates, and modify the urge. It should not hide the face, considering the harm that the SNB immediately spends billions to correct the appreciation of the franc. As she suggested speaking of a market that surréagit at the beginning to major changes, the volatility is still too much. The SNB will wait for some time that the situation is decanted to draw new lines of action valid. Even if it is prepared to act, SNB yet stressed that businesses know that the franc tends to appreciate over the long term, as said in the Blick Fritz Zurbrügg, Member of the triumvirate that directs it. What looks like a unique warning: do not expect miracles. Why this? The Switzerland is just too competitive, as recently claimed time Dominique gross, Professor at Vancouver, «she became a product globally desired». In addition, it displays a debt the lowest in the world, a very positive trade balance, not to mention its low unemployment rate. In times of insecurity, this attracts even more than usual, and enhances the franc. Nothing can against this trend. How long this lonely path is possible? In response to this question of topical in Switzerland (see the edition of January 23), William White, former Chief of the Bank of International Settlements (bis) Economist told Finanz und Wirtschaft that it is more and more difficult for countries outside the euro or dollar to defend area. After Switzerland, the Denmark and the Sweden make it currently the unpleasant experience. (24 hours)
Posted on: Sat, 24 Jan 2015 12:41:39 +0000
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