19 Jan 2015
SNB didn't give any hints, not even to the Swiss government - BBH
FXStreet (Guatemala) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman noted how the SNB's decision to abandon the franc's cap was momentous.
Key Quotes:
"Apparently even the Swiss government learned of it in the eleventh hour. It is ironic that since the crisis, many observers have expressed concern that the independence of central banks was being encroached, and here when a central bank exercises precisely that independence it annoys the very same critics."
"Moreover, unlike the devaluations that were denied until the very last minute, or the BOE abandoning the ERM peg but only after losing billions of sterling, or the US unilaterally breaking the dollar-gold link, here the Swiss franc appreciated. This is not a beggar-thy-neighbour policy."
"The SNB's decision was unanimous. The Danish peg came under attack following the SNB's action. We suspect Denmark's first line of defense will be a return to negative interest rates."
Key Quotes:
"Apparently even the Swiss government learned of it in the eleventh hour. It is ironic that since the crisis, many observers have expressed concern that the independence of central banks was being encroached, and here when a central bank exercises precisely that independence it annoys the very same critics."
"Moreover, unlike the devaluations that were denied until the very last minute, or the BOE abandoning the ERM peg but only after losing billions of sterling, or the US unilaterally breaking the dollar-gold link, here the Swiss franc appreciated. This is not a beggar-thy-neighbour policy."
"The SNB's decision was unanimous. The Danish peg came under attack following the SNB's action. We suspect Denmark's first line of defense will be a return to negative interest rates."