Thursday, September 6, 2012

EUR/CHF ~ Update ~ 6 September 2012

Exactly one year ago the Swiss National Bank (SNB) decided to peg the CHF to the EUR:

One year later the minimum rate at 1.20 still holds as the SNB doubled its foreign exchange reserves to 400 bln.

While this increase is worrying, I doubt that the SNB will stop buying EUR anytime soon. The Swiss economy isn't spared from the problems in the EU. It's not as bad as in the EU as the unemployment rate is still low at 2.9% and the GDP only started to decrease in the most recent quarter (-0.1%). But I still doubt that the SNB will put even more pressure on the economy anytime soon.