The EUR/USD is going on its longest winning streak for a long time. Since May 27, it has improved from 1.2850 to 1.3396 and is approaching 1.34. This despite continuing rumors about ECB rate cuts and a far stronger US economy. What are the reasons? Foreign financing: …
Permanent link to this article: http://snbchf.com/2013/06/basics-of-the-carry-trade/
The title sounds like the success story of the American dream. Thanks to American economic freedom, immigration, savings and investments, the importance of the dollar in the 19th century and the first half of the 20th century was continuously rising. Still, due to the gold standard, the success of the US economy and its …
Permanent link to this article: http://snbchf.com/2013/06/currencies-freedom-immigration-and-savings/
It was an interesting shoot-out between Robert Savage, currency strategist at FX Concepts, and George Dorgan, financial editor and portfolio manager at SFC Consulting, at the yearly Euromoney Swiss Franc Forum. Robert Savage’s thesis was that, similar to the Japanese yen between October 2012 and March 2013, the Swiss franc would become a funding currency for …
Permanent link to this article: http://snbchf.com/2013/05/where-is-the-carry-trade-bob-savage/
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Based on 5 indicators, credit cycles, current account and trade balances, financial position of the concerned country, risk aversion and the alignment of rich and poor nations, we explain the price movement of FX prices on a fundamental data basis. Please read the first part “The Five Main Factors That Determine FX Rates” in order …
Permanent link to this article: http://snbchf.com/2013/02/fx-price-movements/
The effects of so-called “currency wars” and other central bank actions are small compared to the long-term impact made by five catalysts.
Permanent link to this article: http://snbchf.com/2013/02/what-determines-fx-rates/
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The balance of payments leads to many confusions because definitions vary. For example, the IMF’s definition is different from the usual or historical definition. Secondly, the relationship between the balance of payments and reserve assets is difficult to grasp, especially in the IMF definition. Thirdly the origin of “errors and omissions” is often unclear. Therefore …
Permanent link to this article: http://snbchf.com/2012/12/fx-theory-the-balance-of-payments-model-explained-in-400-words/
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Abstract: Basic foreign exchange theory, the SNB price stability mandate and strong fundamentals for Switzerland and bad ones for the peripheral countries of the euro zone speak for the thesis that the EUR/CHF exchange rate might never go over the level of around 1.22 or 1.23 again. Therefore the SNB will need to think about …
Permanent link to this article: http://snbchf.com/2012/02/will-the-eurchf-never-rise-over-1-22-again/
Permanent link to this article: http://snbchf.com/fx-theory/inflation-central-banks-and-interest-rates/
