The Swiss National Bank gave up the promise it gave to the market on September 6th, This promise was stated and reaffirmed as early as Jan 12th, Early morning on January 15th, , the SNB came out with the following statement on their website stating they were dropping their 3.
CHFUSD FX Cross Rate - compare foreign exchange rates –
The Swiss National Bank is, therefore, aiming for a substantial and sustained weakening of the Swiss franc. Mass confusion reigned the morning the SNB removed the peg and cut rates causing the CHF franc, a historic Swiss haven that strengthens in times of economic uncertainty, to soar to unprecedented levels.
You may be curious as to why it was such a big deal and how so many were caught wrong-footed on this move. The following statement came from a high-ranking official of the SNB:. Considering the pair dropped 41 percent after the announcement, and many of these clients were leveraged in their positions, major losses for clients, and potentially the broker ensued.
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We learned that markets and their forces are stronger than any single central bank including the Swiss National Bank. To be fair, there have been multiple central bank program failures over the decades, such as the Thai Baht peg to USD in As with most shocks to the market, the true impact took a while to come to fruition.
Within hours of the SNB announcement, a few smaller brokers closed shop, and there were reports of a few hedge funds having to close their doors because of unsustainable losses. Either way, the parting strategy for traders like you and me is clear.
Pound Swiss Franc Rate Today - GBP CHF
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