Swiss bank to separate its surprise currency interventions

Central Bank of Switzerland has been able to break the will of the participants in exchange markets with their first independent foreign exchange interventions by 1992, the forward Bloomberg.
Currency options prices shows that increasing minority of traders pledged to increase the rate of the Swiss franc. Only months until they believed that the measures of the Swiss central bank will not be able to stop the appreciation of local currency.
Five most accurate currency analysts, the Swiss franc this year expected rate against the euro to move in the range 1,50-1,55 francs for one euros at the end of this year. The course falls within these limits after the bank intervened in the market in March 12.
Experts of the biggest European bank UBS expects that the rate of the currency pair EUR / CHF will end the year at a level of 1.54 francs for one euros. Their projections in the most are close to the course of the first and second quarter.
Analysts other four financial companies – JS Markets in Hong Kong, Canadian Imperial Bank of Commerce in Toronto, Nordea Bank in Stockholm and Standard Chartered in London, predict rates of respectively 1.50, 1.50, 1.52 and 1.55 to December 31.
According to analysts of Morgan Stanley Swiss franc should trade at a level of 1.39 francs for one euros. Their calculations are based on several economic indicators, including the purchasing power of households.
Since the beginning of 2006 to September 2008 the pair EUR / CHF was quoted at an average level of 1.61 francs for one euros, which is 5.6 percent more than the current rate. It falls to 1.4315 at the end of October, after the collapse of Lehman Brothers led investors to seek asylum in Swiss currency.
In early March this year to get free 1.4579 francs for one euros, after which the Swiss Central Bank held its first independent foreign exchange market intervention. As a result, free poevtinya to record 3.3 percent against the euro for one days.
According to foreign analysts, is the central bank intervention on foreign exchange markets at least three times – on May 15, June 18 and June 24. As a result, the Swiss currency poevtinya to around 1.50 francs for one euros but the exchange rate to pass this level.
President of the Swiss Central Bank, Jean-Pierre Roth seeks to keep a low rate of franc and thus stimulating exports and prevent the occurrence of severe deflation, which will further impede the economic recovery of the country.
The index of consumer prices lower for the fourth consecutive months in June and reported an annual decline of 1 percent. This is the strongest country in the deflation of 1959 so far. Gross domestic product decreased by 0.8 percent in the first quarter of the year.
The main stock index in Switzerland Swiss Market has increased by 1.1 percent since the beginning of this year, having decreased by a total of 37 percent in 2007 and 2008 that it ranks among the five worst stock measures are present in developed economies .
Swiss central bank is trying not only to the local currency depreciated, but also to reduce its role of refuge in times of economic uncertainty. Perform a similar function, the U.S. dollar and Japanese yen due to economic and political stability of the two countries.
Swiss central bank bought foreign currency for a total of 4.5 billion euros in the first quarter. The report of the bank, which will be published tomorrow, will show what is the value of those purchases for the second three months of the year.
If the outlook for the global economy does not improve, ex again may rise against major currencies. Swiss government expects the country’s economy to shrink by 2.7 percent this year and 0.4 percent next.

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Finance