Safe Haven Test: 1+ Year After SNB Shock

Aibek Burabayev - Contributor - Metals

More than a year ago, on the 15th of January 2015, the market was shocked by the sharp move of the Swiss National Bank (SNB) abandoning the cap of the Swiss franc to the euro. I dedicated a special post to that event. This time, I've made a comparative chart for the period from the start of 2015 until today to show you how the SNB's move affected the safe haven currency for the past 13 months.

The Swiss franc is in an inverse cross here (CHFUSD) to comfort your perception of both assets dynamics against the US dollar.

Chart 1. Gold vs. Swiss Franc: Gold Wins Again

Gold vs. Swiss Franc
Chart courtesy of

The shock was short-lived as the currency quickly lost the gains during the first quarter of 2015. The Franc caught up with falling gold in a very tight correlation. They bottomed at the same time in March of 2015 and then reversed to the upside and peaked in May of 2015. The similarity of trends continued with the metal gapping deeper on the drops. Rare short interruptions of the link occurred last December and this month when gold increased its value and the franc didn't. Continue reading "Safe Haven Test: 1+ Year After SNB Shock"

Year Of Shocks: Which Of The Safe Havens Saved The Most?

Aibek Burabayev - Contributor - Metals

It's only the middle of the year, but we've already seen quite a lot, even for the seasoned investor.

The Swiss National Bank (SNB) kicked off the ball in January for what has proven to be a nightmare year thus far. It's caused a lot of tears and fears among investors, some of them went bankrupt in one day after it let the franc go.

Greece and it's possible leave of the single currency zone has been dubbed the "Grexit." It's added turmoil to the markets over the last month with currencies crosses opening with gaps on the last two consecutive Mondays. The single currency zone has never been so vulnerable from the day of its launch, as Greek precedent can find followers and bring Germany a lot of headaches furthermore.

The United Kingdom also played its role with the Queen's speech this May containing words of possible divorce with the European Union in 2017, which was named "Brexit" (Britain's exit) a la Grexit.

All of the cases mentioned above are episodes of the world currency war and the first prey of it is the European single currency that has been damaged a lot. Continue reading "Year Of Shocks: Which Of The Safe Havens Saved The Most?"

The Ramifications of the SNB Move

Lior Alkalay - Contributor - Forex

By now you’ve heard the news; a Swiss tsunami has hit FX markets. In a historic move that took even the most seasoned investors and experienced brokers by complete surprise, the Swiss National Bank (SNB) has removed the 1.2 floor for the EUR/CHF, effectively eliminating the Swiss Franc’s peg to the Euro. The Swiss Franc, as a result, surged a jaw dropping 38% vs the Euro and 29.7% vs the Dollar in only a few hours, leaving Swiss equities tumbling and Swissie bears crushed. Undoubtedly, this aggressive move and the volatility it generated will be talked about for years. But what does this SNB move say about Switzerland, about the Euro and, more specifically, about the Swiss Franc’s future?
Continue reading "The Ramifications of the SNB Move"

Safe Haven Test: Gold vs Swiss franc. SNB edition.

Aibek Burabayev - Contributor - Metals

Today is surely Swiss National Bank’s day after it abandoned the cap for EUR/CHF cross which was introduced in September 2011. Swiss franc surged for a record against everything that can be traded. What are the first associations when we are thinking about Switzerland? Yes, first is gold, then luxury watches and of course chocolate. This country has had the gold of the world stored in its banking vaults and a safe currency, but now the Central Bank is nervous because of the currency’s excessive appreciation. So today’s shocking Swiss franc move inspired me to compare both instruments boasting a safe status. Continue reading "Safe Haven Test: Gold vs Swiss franc. SNB edition."