Swiss central bank chief rejects ‘currency manipulator’ label from the U.S.
Elliot Smith, 17 December 2020
LONDON — Swiss National Bank President Thomas Jordan has rejected a U.S. decision to label Switzerland a “currency manipulator.”
The U.S. Treasury on Wednesday added Switzerland to a list of nations it suspects of deliberately devaluing their currencies against the dollar.
Jordan told CNBC on Thursday that neither the SNB nor Switzerland itself has artificially manipulated the value of the Swiss franc.
“Our monetary policy is necessary, it is legitimate, and we have a very low inflation rate — it is even negative at this moment — so we have to fight this deflation, and the Swiss franc is very strong, so it appreciated in nominal terms over the last 12 years enormously, both vis-a-vis the euro and vis-a-vis the U.S. dollar,” he said. Continue reading “Article: Swiss central bank chief rejects ‘currency manipulator’ label from the U.S.”
Swiss franc climbs after US adds it to ‘manipulation’ watchlist
Sam Jones in Zurich and Eva Szalay in London , 15 January 2020
The Swiss franc nudged up to a near three-year high against the euro on Tuesday as markets anticipated the move would limit the Swiss National Bank’s appetite for aggressive action to try to hold down its currency in future.
“The report is a warning shot to the SNB,” said George Saravelos, global co-head of currency research at Deutsche Bank, adding that the franc is likely to push higher from here. It now trades around CHF1.08 against the euro.
The US called on Bern on Monday to “more forcefully support domestic economic activity” by spending money and reducing the country’s already low tax burden, in what was an unusual swipe at a sovereign nation’s financial affairs. “Despite borrowing costs for the Swiss government being among the lowest in the world, fiscal policy remains underutilised, even within the constraints of Switzerland’s existing fiscal rules,” the US Treasury said in its assessment.
The SNB said on Tuesday that its interventions were transparent, and “motivated purely by monetary policy . . . aimed at addressing the negative consequence for inflation and the economy through a highly valued franc.”
“They are not aimed at giving Switzerland advantages by undervaluing the Swiss franc,” it added.
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Forbes Flashback: How George Soros Broke The British Pound And Why Hedge Funds Probably Can’t Crack The Euro
Forbes, 07 June 2015
Greek citizens voted against further austerity measures demanded by the Troika financing their rescue package, casting even more doubt on the country’s future as a member of the eurozone and throwing bond and currency markets into an uproar.
The euro has plunged from $1.20 to $1.09 this year (see chart). The feared unraveling of the currency – which, admittedly, would take a lot more than Greece’s departure – calls to mind another currency fiasco from the early 1990s, when George Soros and a group of other investors that included fellow hedge fund managers Paul Tudor Jones and Bruce Kovner, bet against a central bank’s ability to hold the line on its currency.
Forbes took a deep dive into that trade in the November 9, 1992 issue, illuminating how Soros made $1.5 billion in just a single month by betting the British pound and several other European currencies were priced too richly against the German deutsche mark.
The entire group cashed in big-time. Jones’ funds made $250 million, while Kovner’s Caxton Corp. rang the register to the tune of $300 million, but no one made more than Soros, who cleared $1.5 billion in that fateful month of September. (The score made Soros’ legend and swelled his firm’s coffers; assets under management jumped to $7 billion, from $3.3 billion, by mid-October 1992, and to $11 billion by the end of 1993.)
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