Email of the day
On the EUR/CHF peg:
"Given the ongoing weakness of the euro and the potential for further devaluation how do you rate the possibility of the SNB having to eventually abandon the CHF-EUR peg? What would be the signs that this might happen?"
David Fuller's view I have shown this the other way around, in what I believe is the more familiar EUR/CHF for most people, pegged at CHF1.20. I would have to be a fly on the wall in the SNB to know the answer to your question. However, given the extent to which the CHF appreciated prior to the peg, my guess is that they are relaxed about the current weakness against other currencies such as the USD and CNY during this disinflationary / deflationary deleveraging process that we are seeing.
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