(Bloomberg) — The Swiss central bank imposed a ceiling on the franc’s exchange rate for the first time in more than three decades and pledged to defend the target with the “utmost determination.”
The Swiss National Bank is “aiming for a substantial and sustained weakening of the franc,” the Zurich-based bank said in an e-mailed statement today. “With immediate effect, it will no longer tolerate a euro-franc exchange rate below the minimum rate of 1.20 francs” and “is prepared to buy foreign currency in unlimited quantities.”The market's reaction was brutal and immediate: about 10% drop for the CHF of probably historical proportions for yet another historical move. See for yourself:
Interestingly, gold made a new all time high at around $1,920 but couldn't sustain it and dropped back to below $1,890.
My forecast so far seems to have been accurate (or lucky, or maybe more realistically a bit of both!) and it might be time to initiate a short position. I'll make a post when I do so, as I haven't made my mind yet.