On June 14, I shorted the Euro against the Swiss Franc (EURCHF) at 1.21. The Euro has obediently fallen to a low below 1.08, before staging a massive rally overnight when the Swiss dropped interest rates to nada%, matching the rest of the world. (Expect this headline soon: "Swiss Bankers Head to Rio, Excited to Dance in Carnival Parade") EURCHF is currently trading just under 1.11, time to unwind the position.
The Swiss Franc is still an unrivaled safe haven, but has gotten way ahead of itself. We recently met some American expatriates living in Switzerland, they were stocking up on Ugh boots as they could buy three pairs in the US for the price of one in Switzerland! Another data point: a small Diet Coke costs $12 in Zurich! We'll continue to watch the Franc for a good re-entry point.
Some of the European safe haven money will look elsewhere on the Swiss Central Bank news. Look for the other safe havens to rally today: US Treasuries, gold, silver.
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