CMC Markets: Swiss franc bulls look elsewhere as peg frustrates
(Thomson Reuters ONE) -
CMC Markets provides an analysis
London, 3 May 2012. The recent turmoil in European markets saw investors exiting
euros for the perceived safe haven of the Swiss franc. This flight of capital
punished an otherwise responsible economy, making its exports prohibitively
expensive with deflationary consequences for the Swiss economy.
In the space of four months between April and August 2011 the Swiss franc
appreciated from 1.3200 against the euro to just above parity at 1.0070. This
meant the Swiss authorities were faced with enormous pressure to avert a
potentially ruinous rise in its currency. It's a big ask, the Japanese have been
trying to achieve this for years yet the Bank of Japan has merely served to slow
the process down and it is now widely accepted that the Swiss National Bank
could face the same problems. Decisive action was needed, so on 6(th) September
last year the Swiss National Bank caught the market on the hop, announcing that
the EURCHF peg would start at 1.2000 and that the currency would not be allowed
to trade above that. The effect was immediate with the currency leaping from
1.1160 to 1.2150 in the space of 30 minutes as a myriad of long Swiss franc
positions got blitzed out.
Now that the peg has been in place for some time there are a number of ways the
market could react.
Michael Hewson, Senior Market Analyst at CMC Markets said: "Over the last few
months the Swiss franc has only managed to depreciate as far as 1.2400 against
the single currency as the market starts to retest the Swiss National Bank's
resolve in defending the peg.
Since the peg was introduced, volatility in this Swiss cross has more or less
dried up. Yet continued uncertainty in Europe will mean it might not be long
before the market looks at taking on the Swiss National Bank again. We also know
from history that currency pegs are never that successful for too long, hence
the reasons why the Japanese have never adopted that approach. If you take the
view that the Swiss National Bank will only serve to delay a rise in its
currency then buying against the Japanese yen might be an alternative play."
CHF/JPY December 2011 - April 2012
(Source: CMC Markets NextGen trading platform)
Michael Hewson continued: "The Swiss franc has certainly performed better
against the Japanese yen than against the euro since the beginning of the year,
up from lows of 80.00 to levels near 90.00, a rise of over 10%. Even against the
high yielding Australian dollar, the Swiss franc has gained from levels near
parity at the beginning of the year to be trading at 1.06, a rise of 6%.
When compared to its performance against the euro where it was trading just
above 1.2100, these are fairly impressive returns and highlight the flexibility
in having the option of trading in multiple currencies.
If seasoned traders are feeling particularly adventurous they could even look at
trading the Swiss franc against the Turkish Lira, though its performance hasn't
been as good against this particular high yielder."
For more information please contact:
Adam Smith or Kelly Hollidge at Teamspirit Public Relations on 0207 360 7878 or
cmcmarkets(at)teamspiritpr.com
Jane Bryant (Global PR Manager) at CMC Markets on 0203 003 8911 or
j.bryant(at)cmcmarkets.com
Notes to Editors
CMC Markets is a leading global provider of financial spreadbetting, CFD and
foreign exchange (FX). Since Peter Cruddas founded CMC Markets in 1989, the
company now services more than 80,000 clients worldwide, who placed
approximately 30 million trades last year.
With offices in London, Paris, Milan, Madrid, Vienna, Sydney, Tokyo, Toronto,
Beijing, Auckland, Oslo, Stockholm and Singapore, CMC Markets represents clients
in over 70 countries.
CMC Markets UK Plc and CMC Spreadbet Plc (collectively known as CMC Markets) are
authorised and regulated in the UK by the Financial Services Authority. For
further information on CMC Markets please visit www.cmcmarkets.co.uk
The material (whether or not it states any opinions) is for general information
purposes only, and does not take into account your personal circumstances or
objectives. Nothing in this material is (or should be considered to be)
financial, investment or other advice on which reliance should be placed. No
opinion given in the material constitutes a recommendation by CMC Markets or the
author that any particular investment, security, transaction or investment
strategy is suitable for any specific person.
CHF/JPY December 2011 ? April 2012:
http://hugin.info/152337/R/1608503/510558.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: CMC Markets via Thomson Reuters ONE
[HUG#1608503]
Datum: 03.05.2012 - 14:18 Uhr
Sprache: Deutsch
News-ID 142426
Anzahl Zeichen: 5747
contact information:
Town:
London
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 283 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"CMC Markets: Swiss franc bulls look elsewhere as peg frustrates"
steht unter der journalistisch-redaktionellen Verantwortung von
CMC Markets (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
