News Swiss Franc Soars 30% After Cap Removed

[RummyBoy]

Europe thrown into turmoil as Swiss let franc soar - Yahoo Finance

Well a lot of people have been telling us to expect some surprises in 2015........ I think this is probably the first of many.

[OneHungLo]

Originally Posted by RummyBoy

Europe thrown into turmoil as Swiss let franc soar - Yahoo Finance

Well a lot of people have been telling us to expect some surprises in 2015........ I think this is probably the first of many.

Yeah I saw that gold jumped +$26.50!

[RummyBoy]

Originally Posted by OneHungLo

Yeah I saw that gold jumped +$26.50!

That's no big surprise, gold did really well last year (apart from in USD terms where it went down -1.5%) and there are just SO MANY fundamental reasons why gold and silver have to move higher that its almost baked in the cake. I already made this my easiest bet for the next five years to more than double from current levels:

https://gfy.com/fucking-around-and-pr...highlight=2020

But that's not to say they wont be extremely volatile during the period....

[pornmasta]

i think it is a consequence of the money war with Russia.
But it is affecting the exchange rate between euro and dollar.

[pornmasta]

I think that it could mean the end of the euro

[RummyBoy]

Pretty historic move for a currency in a single day - don't know if that's ever happened before. Unsurprisingly, there's been fallout:

FXCM, Brokerage Hit by Swiss Shock, Gets $300 Million From Jefferies Owner LeucadiaÂha - Bloomberg

Swiss Franc Trade Is Said to Wipe Out Everest’s Main Fund - Bloomberg

I guess there'll be some more surprises in the run up to March....

[iamBoogieman]

Money war. Oil price drop affects all.

[fappingJack]

World war 3

[RummyBoy]

Bank Losses From Swiss Currency Surprise Seen Mounting - Yahoo Finance

Losses are mounting here.... I wonder if some big bank player made a MAJOR bet and lost big out big time.

[OneHungLo]

Originally Posted by RummyBoy

Bank Losses From Swiss Currency Surprise Seen Mounting - Yahoo Finance

Losses are mounting here.... I wonder if some big bank player made a MAJOR bet and lost big out big time.

I Imagine they lost on the sudden collapse in oil price too. Hopefully gold will continue to rise.

[Pwmp]

Several brokers we're shut down over it. I believe the first was Excel in Aust. when they released the report, a few hours later Excel couldn't even meet the 1 mil. they require for firms to keep at all times.. Lot of mid sized traders wiped completely out. I made a few bucks from the blowback on usd-jpy I was in, but was glad to be miles from any trade with the Franc.

[FlowerKid]

Some other brokers are billionaires now.

[Antonio]

Originally Posted by pornmasta

I think that it could mean the end of the euro

If I had a Euro for every time somebody says it's the end of the Euro, I'd be super rich.

[RummyBoy]

Originally Posted by Antonio

If I had a Euro for every time somebody says it's the end of the Euro, I'd be super rich.

Exactly....... its not the end of the Euro but the Euro Zone is expected to announce substantial QE on Thursday and if that happens expect the euro to weaken even more versus the USD and gold probably will get a significant POP or it may strengthen the dollar even against gold.

Draghi Push Seen Delivering $635 Billion With QE Forecast - Bloomberg

But then the US will probably do QE4, as an excuse to match what the euro zone is doing.....

[Barry-xlovecam]

Euros are in motion ...

Finding safe haven.

The ECB QE is too little and too late.

Importantly, it now looks as if National Central Banks (NCBs) will be responsible for purchasing the assets and will bear the risk ? as opposed to the ECB balance sheet, which is usually the case for monetary policy operations. This is to counter concerns about the pooling of fiscal risk via the ECB ? ultimately, all Eurozone states underwrite the ECB balance sheet so would jointly backstop any sovereign debt purchases. In practice, this should not have a huge impact on the way the programme works ? the money will still be injected into the Eurozone economies. It does raise question though about the single monetary policy in the Eurozone and highlight the constraints under which the ECB operates. [Update - further points here, if an NCB did not want to continue to purchase bonds the ECB would be unlikely to be able to compel them to do so. While this is unlikely it could arise since some NCBs are staunchly opposed. It could also become important from a legal standpoint as it would make it easier for a single NCB to remove itself from the programme if its National Constitutional Court ordered it to do so.]

Wrong To Assume Quantitative Easing Will Be As Effective In Eurozone As Elsewhere - Forbes

Too little and too late so the money moves to a safer place -- the Swiss just opened the floodgates. The EU won't collapse nor will the Euro but the entire EU will continue to be indecisive and dysfunctional.

"In my opinion, it will not cease, until a crisis shall have been reached, and passed. "A house divided against itself cannot stand."" ... Abraham Lincoln

[RummyBoy]

Federer on Swiss Franc Shock: "Does It Mean I've Got to Win Now?" - Bloomberg

[pornmasta]

Originally Posted by RummyBoy

Exactly....... its not the end of the Euro but the Euro Zone is expected to announce substantial QE on Thursday and if that happens expect the euro to weaken even more versus the USD and gold probably will get a significant POP or it may strengthen the dollar even against gold.
...

if the european countries are unable to pay their debts in foreign currencies because the euro gets weaker, it removes one of the reason to keep the euro and it will probably increase the borrow rate of some states.

[RummyBoy]

Originally Posted by pornmasta

if the european countries are unable to pay their debts in foreign currencies because the euro gets weaker, it removes one of the reason to keep the euro and it will probably increase the borrow rate of some states.

It's a good point..... but my theory has always been that it will continue in the way it has been ie everyone does QE together and race to the bottom.

So euro weakens for a while and everyone else is doing QE. Then the US has to step in and do QE to bring the USD back into line with all other trading partners and so on. Utimately everyone is devaluing at the same time and against only commodities and primarily non-government forms of money like Gold and Silver.

[editeur]

It seems like US badly wants to get rid of part of their debt via currency printing and devaluation, and US persuaded reluctant EU at last to join their ranks. So now capital has no place to flee to from the QE. Swiss Frank is too small for this.

[thecatwrites]

Originally Posted by RummyBoy

Europe thrown into turmoil as Swiss let franc soar - Yahoo Finance

Well a lot of people have been telling us to expect some surprises in 2015........ I think this is probably the first of many.

and there's more to come.

[RummyBoy]

Originally Posted by thecatwrites

and there's more to come.

Very true cat! Some big stories been made on wall street already:

How Swiss Shock Humbled the King of Leveraged Currency Trading - Bloomberg