People are lining up at a currency exchange office in Geneva, January 15, 2015 (AFP / Fabrice Coffrini)
The shock wave caused by the surprise decision to leave Switzerland to enjoy its coveted currency has hit its economy and continued Friday to cause waves on the financial markets.
the Swiss Stock Exchange continued its plunge in the opening up losing -5.78%, after unscrewing -8.7% Thursday, a record drop since 1988.
On Thursday, Swiss franc gained about 20% against other currencies. It now trades around parity with the euro or 1 euro = 1 Swiss franc.
All of the country’s economic circles have expressed their concern after the abandonment of a monetary policy that put them in more than three years away from a rise of the Swiss franc over the threshold of 1.20 CHF per euro.
Swiss franc curve evolution compared to the euro since 2007 (AFP /)
In a statement, the Swiss business, together in the economiesuisse association indicates that the decision “has caught the markets and businesses.”
“In the eyes of the economy, this measure is incomprehensible to the current time,” added the Swiss patrons.
economiesuisse already provides that exporting companies and the industry tourism are forced to “trim”.
The measure also continues to generate turbulence in the currency markets. In the US, the largest online broker FXCM announced no longer able to meet the prudential rules because its ruined customers owe $ 225 million, while in Britain, the brokerage Alpari UK expressed insolvent
-. The price jumped watches –
emblematic sector, the Swiss watch industry sees the price of its watches jump from 15% to 20% for customers foreigners, while the International Fine Watchmaking Exhibition, which hosts thousands of foreign retailers, will open its doors next Monday in Geneva.
Most orders very major watch brands have happened during the show .
On Friday, the boss of a small watch brand, H. Moser & amp; Co., located in northern Switzerland, in Neuhausen am Rheinfall, close to the German border, published an open letter to the president of the SNB.
In this letter, he announced that “the first retailers “that sell watches, sold 95% abroad, have” canceled their orders in response to your ad. “
This entrepreneur Edouard Meylan, also added that he is tempted to relocate its business Germany, very close.
On Friday morning, the Swiss bank UBS was the first to cut its forecast for growth for Switzerland in 2015, because of this new financial situation.
People scrutinize exchange tables UBS in Zurich, January 15, 2015 (AFP / Alessandro Della Bella)
The UBS now expects growth of 0.5% in 2015 (instead of 1.8% previously) and 1.1% in 2016 (instead of 1.7% ).
According to economiesuisse, the “shopping tourism”, that of Swiss who cross the border to shop and penalize local merchants, is also likely to start over again on the rise.
Switzerland had already experienced a similar situation in summer 2011, amid the global financial crisis. The Swiss franc at the time was coveted, playing its full role as a safe haven.
So, the Swiss franc had also soared to parity with the euro.
This international appetite for the franc in September 2011 had led the Swiss National Bank to take the floor rate, preventing its currency goes below threshold of 1.20.
For three and a half years, the SNB bought conscientiously euro when too many speculators were interested in Swiss franc and put pressure on the rise. Almost 4 years, its reserves in euros have been multiplied by 10.
An exchange table showing exchange rate euro / Swiss franc, visible in an office of the Swiss bank UBS January 15, 2015 in Zurich (AFP / Alessandro Della Bella)
According to experts, the situation became increasingly untenable for the national bank, who preferred to cut off the hand, rather than cut off his arm.
The president of the National Bank, Thomas Jordan has indicated Thursday at a press conference in Zurich that the worsening of monetary disparities, which led to the abandonment of the floor rate, “could well deepen”, suggesting that the measure could have had much more painful effects, if it had been taken as a measure of monetary easing expected by the European Central Bank on 22 January.
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