A year before the date of the Swiss franc rose 3% against the dollar, 15% against the euro and more than 5% on the basis of balanced trade. He recently touched an all time low against the EUR and close parity with the USD. Since the beginning of summer, Frank has brought together an incredible 15% against the greenback. I don't think I'm alone in scratching my head in disbelief I wonder what can be behind Frank Rost?
At this point everyone is familiar with the safe-haven. In principle, the problem of double dip recession fire outbreaks in risk and prompted investors to shift of capital in locales and investment vehicles that are considered less risky. Switzerland and the Swiss franc, both benefited from this phenomenon: "an anxious investors, seeking refuge from concerns about the health of European banks which knocked stocks and sent overseas euro area Government bond spreads above, is the single currency.The Swiss franc's favor. "Suffice it to say.
At the same time, the USD and the JPY is also considered a safe-haven currencies, as you can see from the chart below, three hardly traded in lockstep. in other words there must be something different, Frank. Economists suggest a strong economy: gross domestic product grew 0.9% in the first quarter, when more than 1%. "Basic economics of Switzerland are very healthy. Concerns about deflation declined. " "The consensus is that the Swiss economy will grow by nearly 2% per year.However, this hardly impressive, especially when compared to other industrialized nations in addition Swiss interest rates remain low, it means the possibility for the Franc is high. There must be something else going on.
Actually it looks like the Swiss franc growth is kind of a self-fulfilling. For most of 2009, Swiss National Bank (SNB) spent about $ 200 billion-value artificially francs. During this period, Frank remained stable against the euro and depreciated against the dollar and yen. Finally broken "line in the sand" € 1.50, nevertheless, Frank is currently evaluating quickly. Why?Because OF THE SNB is no longer has any credibility he lost $ 15 billion (over EUR depreciation) tries to protect Frank, and in hindsight, the mission was a complete waste of time. As a result of a new round of intervention is speech.In the foreign exchange market, also rejected the possibility of a new intervention and it seems they punish THE SNB (Frank) to even try.
Analysts say markets also began to see Franck reincarnation of German, due to the strong economy, the massive reserves, traditional safe haven status and close ties with the German economy. "Those that fear eurozone collapse and/or want to make exclusive rates on Germany by Frank as a proxy.I personally do not understand the logic of this strategy, but where the perception of reality, the more important to understand that other investors see connection, instead of seeing the connection for yourself.
Go ahead, it's mixed feelings surrounding Frank.One analyst warns customers, "I would be wary of chasing it too far in the short term, there is still a huge amount of. headwinds there."According to another analyst, "we expect that Frank is still strong for decades. Personally I tend to side with the former point of view in terms of basic there isn't a whole lot to keep Franck, move up, and his recent surge, probably running on fumes. at least I would expect in the near future.
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