CHF might blow up huge http://mrmortgage.ml-implode.com/wp-content/uploads/2008/10/global-banks-problems2.png banks leverage ratio 30-1 and tons of short-term liabilites. btw I presented these facts to jim rogers, you want to know what he did?he called me cowardly lion and other names for not shorting the franc, now thats a winning argument
makloda, this is just too funny, my email changed rogers mind. guess he is more flexible than I thought http://www.youtube.com/watch?v=-yfMYwv4VOw&playnext=1&playnext_from=QL
hey cats...the USD/CHF is so OVERSOLD today on Friday...the daily RSI is around 25 and the Stoch is under 20...this combined with overbought Eur/Gbp will lead to mini corrections for both and the USD/CHF most likely to head lower after this "mini correction" and also meet "parity"...again in 2009?...just my thoughts....yours? when considering trades in the USD/CHF...you must observe where the EUR/USD is going...here is why...serious information... click here: http://fxtradeinfocenter.oanda.com/...relations.shtml
I totally agree. JPY is the safe haven currency, the Swiss Franc definitely isn't. In fact, long JPY short CHF could be an interesting play.
Actually, long EUR short CHF may be the best play. This cross rate is fairly stable, most of the other price-moving factors are very similar between these two currencies, so your risk if wrong will be quite low. If you're right, then CHF will decouple from EUR due to the debt/crisis shock, much as the GBP decoupled from EUR a year ago (whereas before it was in a stable range). Being long JPY or USD vs CHF exposes you to the individual risks of those currencies - with JPY, the risk that things calm down and/or the BoJ intervene could cause a 10-15% correction. With USD, any number of factors could cause a huge move either way. But EURCHF is only going to move 10%+ under two scenarios I can think of - that the Eurozone goes down the toilet (e.g. severe banking crises in the member states, or the whole currency project falls apart), or that Switzerland has a UK-style economic debacle. Assuming the Eurozone doesn't melt down first (and this seems unlikely - Switzerland is more vulnerable by far to the international effects), it therefore provides something akin to a free put option. If wrong, the cross rate should stay stable. If right, then CHF could fall 30 or 40% against the Euro. This could well be one of the best risk/reward trades of 2009. Nice find, Daal.