The Currency Converter

Archive for the ‘Swiss Franc’ Category

Swiss National Bank Maintains 1.20 Euro Exchange Rate Cap

Thursday, March 15th, 2012

The SNB has doubled its 2012 growth outlook and vowed to continue enforcing the EUR/CHF cap at 1.20. The central bank also held interest rates at 0%-0.25%.

Swiss Franc, Exchange Rate Cap, Euro, SNB

By Josh Ferry Woodard

On September 6th 2011 the Swiss National Bank set a minimum exchange rate of 1.20 Swiss Francs to the Euro to combat the Franc’s intense appreciation in value. The ongoing Greek sovereign debt crisis had spooked investors into selling the single currency, and the US economy was suffering from a similar vote of no confidence. Seeking a safe haven from the financial meltdown, investors pumped large amounts of Euros and Dollars into the Swiss currency.

The Big Mac index, which measures price parity between countries and currencies, indicated that the Swiss Franc was overvalued by 98% against the Dollar. This had an adverse effect on the Swiss economy; the Franc was so strong that export prices soared way beyond competitive levels. Swiss companies were posting terrible profits and many threatened to relocate outside of the country if the Franc’s value continued to inflate beyond its means.

The SNB responded by vowing to “buy foreign currency in unlimited quantities” to keep the Euro to Swiss Franc Exchange Rate above 1.20. Within 15 minutes the Franc lost 9% against the US Dollar and 8.8% against the Euro, stunning the currency exchange market.

Well that was then and this is now…

This morning the SNB almost doubled its growth outlook for 2012 from 0.5% to 0.8% growth: “There are growing indications that Switzerland’s economy is stabilising.” The SNB claimed that the exchange rate cap was a significant factor in their improved forecast: “While the high value of the Swiss Franc continues to present enormous challenges to the economy, the minimum exchange rate is having an impact. It has reduced exchange rate volatility and given business leaders a better basis for planning.”

The Swiss National Bank remains dedicated to buying foreign currency in unlimited quantities to maintain the EUR/CHF 1.20 exchange rate cap. Following the decision the Swiss Franc improved by 0.28% against the Euro, 0.40% against the Pound, and 0.58% against the US Dollar (11:38 GMT).



15th March 2012 Swiss Franc Exchange Rates:

Today’s Euro to Swiss Franc Exchange Rate is 1.210

Today’s Pound to Swiss Franc Exchange Rate is 1.452.

Today’s Swiss Franc to US Dollar Exchange Rate is 1.079.




Swiss Franc Exchange Rate: The Swiss Franc went sideways against its safe haven counterparts

Thursday, December 9th, 2010

The Swiss Franc went sideways against its safe haven counterparts the U.S dollar and Japanese Yen but made gains against the weaker euro of 0.2% in London trading.

The trustee representing victims of the US financier Bernie Madoff’s fraudulent operations has increased the amount it is seeking from the Swiss bank UBS. Irving Picard filed a $2bn (£1.3bn) lawsuit against UBS in November, accusing it of lending “an aura of legitimacy” to funds run by Madoff, whose so-called Ponzi scheme led to clients losing billions of dollars. He has now outlined 26 additional counts of financial fraud and misconduct against the bank, bringing the total damages sought to $2.5bn. UBS denied the allegations, saying they are without merit. The case against HSBC rests on allegations that it failed to act on signals that should have prompted it to stop channeling funds to Madoff’s operations.
HSBC and JP Morgan Chase also deny any wrongdoing.

Written by James Rowe

Swiss Franc Rate News: The Swiss Franc lost nearly 1% to the Euro exchange rate

Thursday, December 2nd, 2010

UBS is expanding commodities coverage to include investor-led flow trading in agriculture, base metals and energy, the Swiss bank said on Wednesday. UBS which suffered heavy writedowns during the financial crisis and had to be bailed out by the Swiss government was already active in precious metals. In January 2009 the wealth management giant took the radical step of selling its base metals, oil, and U.S. power and gas business to Barclays. It said at the time it would exit most commodities businesses, including agricultural goods and base metals. It held on to precious metals, index and exchange-traded commodities. Jean Bourlot, global head of commodities at UBS Investment Bank, heads a team of around 40, which he plans to double within two years. “UBS has always maintained its core strengths in commodities, like our market-leading indices and precious metals offerings — in that sense we never left,” Bourlot said in a statement. “Quite simply our expansion into flow trading, in areas such as agriculture, will leverage and complement what already exists inside UBS,” he added. The Swiss Franc lost nearly 1% to the EUR but traded sideways against its safe haven counterparts the Japanese Yen and US Dollar.

Written by James Rowe

Currency Exchange Rates: An update for the Swiss Franc

Thursday, November 25th, 2010

The Swiss National Banks chairman commented that the Francs appreciation will at some point weigh on Swiss exports. As we know the Franc has been strong for some time now and it is surprising that the Swiss trade balance continues to print a surplus. There are several different reasons for this, the strong increase in exports to Asia being one. Also a growing demand for consumption and pharmaceutical goods. The general consensus amongst traders is that Switzerland can keep tight monetary conditions combining Franc strength and low interest rates without seeing a reduction in economic activity. As long as tensions remain high between North and South Korea and cracks continue to appear in the Euro zone then Safe haven assets like the Franc will remain strong. Expect EUR CHF to get to 1.30 over the medium term and USD CHF to stay below or close to parity next year.

Today sees the US Thanksgiving holiday which should contribute towards lower trading volumes and less volatility.

Written by James Rowe

Swiss Franc Exchange Rate News

Tuesday, November 23rd, 2010

In a day where international investors were once again spooked about sovereign debt default in the peripheral euro zone countries, the Swiss franc was again sought after for its ‘safe haven’ status rising across the board. The Swiss National Bank has repeatedly intervened this year in the international markets to stem the rise of the CHF to no avail as repeated worldwide economic worries have simply burnished the status of the Swiss franc with no respite in sight.

Written by Tony Redondo

Swiss Franc Currency Update

Monday, November 22nd, 2010

The Swiss Franc remained generally on the defensive against the Euro on Friday, but did find some support under 1/3620. The Franc also secured support close to parity with the U.S Dollar, with the greenback weakening back towards 0.9920 in New York. Defensive demand for the Franc as a safe haven remained lower, as markets remained confident that a support package for Ireland would be agreed. It may prove more difficult for the Euro to gain sustained relief, given underlying fears surrounding the region, with Swiss economic confidence also weaker.

Written by Adam Solomon