How Did Switzerland's Decision to Scrap Its Currency Cap Impact Global Markets?

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In summary, the Swiss central bank caused market turmoil by removing the cap on the Swiss franc's exchange rate against the euro, leading to increased volatility in bonds and currencies worldwide. This move also raised concerns about the global economy. As a result, a US brokerage and a New Zealand-based dealer suffered losses and potential non-compliance with capital rules. The franc's value jumped by 30% against the euro, with its popularity increasing as a safe-haven currency. The Swiss government printed a large amount of francs in 2011 and the currency is often referred to as the "Euro without Greece."
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http://www.wsj.com/articles/switzerland-scraps-currency-cap-1421320531
Switzerland’s central bank triggered turmoil in the markets Thursday when it unexpectedly scrapped its cap on the Swiss franc’s exchange rate against the euro, a move that unleashed new volatility among bonds and currencies around the world and further underscored growing concerns about global economic prospects.

http://www.bloomberg.com/news/2015-...roker-closes-on-losses-after-swiss-shock.html
Casualties mounted from the Swiss currency shock as a U.S. online brokerage said client debts threatened to push it out of compliance with capital rules and a New Zealand-based dealer went out of business.

A news report about the NZ based dealer going out of business is available - http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11387361
 
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The Swiss Franc is the sixth most-traded currency on the planet, and it exploded in value this morning by 15 percent.
http://www.marketplace.org/topics/world/swiss-national-bank-gives-ghost

Swiss franc jumps 30 percent after Swiss National Bank dumps euro ceiling
http://www.reuters.com/article/2015/01/15/us-markets-franc-idUSKBN0KO16Y20150115
(Reuters) - Switzerland's franc soared by almost 30 percent in value against the euro on Thursday after the Swiss National Bank abandoned its three-year old cap at 1.20 francs per euro.

Apparently the Swiss government printed about 500 billion francs in 2011- and when the Euro gets in trouble, people buy Swiss francs.

It's nice to be wanted.
 
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People call the CHF the "Euro without Greece".
 
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Related to How Did Switzerland's Decision to Scrap Its Currency Cap Impact Global Markets?

1. What caused the Swiss move to roil global markets?

The Swiss move, also known as the "Francogeddon," was caused by the Swiss National Bank's sudden decision to remove their currency's peg to the euro. This unexpected move caused a major shift in the global currency market and led to significant economic repercussions.

2. How did the Swiss move affect global markets?

The Swiss move caused major disruptions in the global markets, as the Swiss franc rapidly increased in value against other currencies. This led to losses for many investors and businesses, and also impacted trade and tourism in Switzerland.

3. Why did the Swiss National Bank remove the peg to the euro?

The Swiss National Bank stated that the peg was no longer sustainable, as the euro had significantly weakened against other currencies. They also cited concerns about the potential impact of the European Central Bank's stimulus measures. This decision was made to protect the Swiss economy and maintain price stability.

4. How did other countries respond to the Swiss move?

Other countries, particularly those with strong trade ties to Switzerland, were greatly impacted by the Swiss move. Some countries, such as Poland and Hungary, saw their currencies weaken as investors sought safer investments in light of the Francogeddon. Other countries, like Japan, saw their stock markets plummet due to the sudden shift in the global economy.

5. What lessons can be learned from the Swiss move?

The Swiss move serves as a reminder of the interconnectedness of global markets and the potential impact of unexpected decisions made by central banks. It also highlights the importance of diversification and risk management in investments. Furthermore, it emphasizes the need for open communication and transparency from central banks to avoid such drastic market reactions.

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