As Obama prints billions of greenbacks, the smarties are moving into Swiss francs

The more he prints, the less value each one has. Sad when a small Alpine country is more trusted than the mightiest power on earth. But it is really bugging out the Swiss. They are printing more Francs to cope with the demand but the excessively high value being placed on their currency is still distorting their trade with other countries

THE Swiss franc has weakened sharply against other currencies, hours after the Swiss National Bank said it would intervene to stop an irrational rise in the franc against the euro. The SNB had no comment on the move, saying they already issued a statement after a policy meeting at which the central bank kept interest rates stable at 0.25 per cent.

However, currency analysts suspect it was an intervention, as the SNB likely acted to prove their resolve when the euro actually crept lower despite an early warning statement. The Bank for International Settlements, which traders say would have been the one to sell Swiss francs on behalf of the SNB, also declined to comment.

The franc's sharp move comes as the SNB has promised to fight the risks of deflation and shrinking economic growth, made worse by a strong currency, which also puts the price of their exports at a disadvantage. Investors have been flocking to the franc because it is considered a safe haven amid the global financial crisis....

"I think what we are seeing is a real battle," said Simon Derrick, a currency analyst at the Bank of New York Mellon. "For the past three months, the SNB has been fighting a losing battle with verbal intervention. Every time they have commented on the strength of the Swiss franc, the market has taken less and less notice.” ...

The SNB last officially intervened in the currency markets in March, when it sold the Swiss franc to push the euro up from the SwFr1.48 area to over SwFr1.53. The aim of the SNB's purchases of foreign currencies was to prevent an appreciation of the Swiss franc against the euro, in its role as a save-haven currency, SNB's Mr Jordan said.

More HERE


Posted by John Ray.