SNB & CHF

Building the world's steepest funicular railway from Schwyz to Stoos is proving to be much more difficult than planners imagined. (SRF/swissinfo.ch) --- swissinfo.ch is the international branch of the Swiss Broadcasting Corporation (SBC). Its role is to report on Switzerland and to provide a Swiss perspective on international events. For more articles, interviews and videos visit swissinfo.ch or subscribe to our YouTube channel: Website: http://www.swissinfo.ch Channel:...

Following the mini-devaluation in August, the yuan appreciated in September and October.  It began depreciating again in November and this has continued through the first half of December.   The dollar finished the local session at new multi-year highs against the yuan.  Many observers see in the pre-weekend announcement about monitoring the yuan against a basket an indication of the intentions of officials to push their currency down further against the dollar.  We suggest that China...

(from my colleague Dr. Win Thin) EM starts the FOMC week off on a soft footing.  Besides the prospects of Fed liftoff Wednesday, oil prices are making new cycle lows.  Uncertainty about China’s FX policy is also making markets nervous, though we think this concern is misplaced.  Overall, the global backdrop for EM remains very negative and we do not see much chance for a rebound after Fed lift-off is seen.  In recent days, USD has made new all-time highs against COP, MXN, and ZAR. ...

Spain goes to the polls on December 20.  The country's political and economic dynamics are different than other EMU countries that have held elections this year.  The economy is among the strongest performers in eurozone, though unemployment remains stubbornly high.  Today is the last day that election polls can be published.  El Pais and El Mundo papers published the results of surveys today.  They confirm what many have come to expect.  The ruling center-right Popular Party will remain...

The dollar-euro is the most actively traded currency pair in the world.  It is often what is meant when people ask where is the dollar trading.   Dollar bullish sentiment prevailed in 2015, but many large banks doubt that it will continue in 2016.  This Great Graphic from the Wall Street Journal shows the euro forecasts of eleven major banks.   Indeed, it appears that only one of the eleven banks expect the euro to finish next year below parity ($1.00).  Three banks, HSBC, UBS and JP...

The US dollar is firmer against the euro, sterling and yen, but within the ranges seen before the weekend. The greenback is softer against the dollar-bloc currencies after early gains were unwound.  The biggest mover has been the South African rand, which is up a little more than 5%, retracing nearly half of last week's losses.  Under strong pressure, President Zuma reinstated former Finance Minister Gordhan. Gordhan had been Finance Minister from 2009 until 2014.  The macroeconomic...

“That [half a dollar of buying] frenzy was not stackers lining up to buy phyz. It was speculators buying paper. Why does that matter? Speculators, who typically use leverage, can’t hold the market price against the tide of the hoarders. They can push for a while, but they have to close their positions sooner or later, either to take profits (as they reckon them, in dollars) or to stop losses.” This is what we wrote last week. It turned out to be prescient. This week, the price of silver...

After much hemming and hawing since mid-year, the Federal Reserve is finally poised to raise rates for the first time in nearly a decade. Indeed, given the speeches by the leadership and the economic data, especially the labor market readings, the failure to raise rates would likely be more destabilizing at this juncture than lifting them.   Surveys of market participants suggest that a Fed hike is as done of a deal as such an event can be. A recent Reuters survey found all but one...

1. Activity increased during the Commitment of Traders reporting week ending 8 December.  There were four significant (10k+ contracts) gross currency adjustments by speculators.  Given that this period covers the second largest gain in the euro's history, it is surprising that it did not meet the threshold.  It is astounding that only that speculators added only 1.8k contracts to their gross long position   2. The bears covered 11.7k short yen contracts, leaving them 94.5k.  Both the...

The US dollar turned in a mixed performance in the week following the ECB's surprise and the healthy US jobs report.  In some ways, the greenback was like a fulcrum, not the driver.   The dollar-bloc currencies and the Norwegian krona were on one side, and the euro, Swiss franc, yen, and sterling were on the other.   The continued, and sharp drop in energy prices and commodity prices more generally, coupled with risk-off impulses spurred by equity market declines, and year-end position...