Swiss Decision Likely With Knowledge of ECB QE Program

While the move caused tumult in the financial markets, it will be a boon to Swiss consumers. An item priced at 50 euros in Brussels would suddenly cost 51 francs in Davos on Jan. 15 after costing 60 francs on Jan. 14.

From a more strategic viewpoint, the Swiss bank defended its currency against a likely European Central Bank move that will see a massive bond-buying program likely to devalue the euro further. Nomura Securities economists speculated that the Swiss move was a signal that the ECB’s quantitative easing program would exceed market expectations.
In the face of that, the SNB decided it no longer could stand by and let its own currency decline any further.

For consumers in Switzerland, it meant cheaper goods, but for an economy that relies on exports, it made life more difficult for companies.

via CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza