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The SnB said they'll defend the 1.2 level on eur/chf at all cost. To me, this is probably the best opportunity in years to make abnormal return in a relative short timeframe with the rare use of heavy leverage.
I'm surprised to see little talk of this rare opportunity to buy with the SnB.
Are you trading this scenario yourself ?
"We may not be able to control the wind, but we can always adjust our sails"
Can you help answer these questions from other members on NexusFi?
Not only, limiting the market is never a good idea, same Swiss policy was made in 1978, with a consequent increase of inflation and economy crash, in addition loss of interest from big player as the currency fluctuation was limited. CHF is seen as a refuge currency only if it's freely traded. As a recent example look at the ban of EU banks short selling, did it stop their fall down ?
I believe this scenario differs a lot from BoE scenario back in the early 90s. As part of the ERM-deal, they had to intervene if the currency fluctuate more than 6%! So they had to defend that level, which in reality meant nothing it was just an artificial level they had to keep up. Compared to today's situation with the strong chf which they HAVE to do something about or they will suffer a lot.
So the motivation is slightly different; BoE intervened because of a stupid agreement they never should have entered in the first place while SnB intervene because they have to save their own economy.
"We may not be able to control the wind, but we can always adjust our sails"
