Bringing you live news and features since 2006 

Switzerland flag

Swiss euro peg decision is ‘bold’ move


Sandra Holdsworth, fixed income manager at Kames Capital, comments in the SNB’s decision to scrap its currency peg to the euro…

The Swiss National Bank (SNB) made a bold policy move today, breaking with the policy that was implemented in the turmoil of the Eurozone crisis.
The Bank had been maintaining a currency cap against the Euro at a rate of 1.20 and had been supporting this cap by accumulating reserves .Today this cap was removed leading to a swift appreciation of the Swiss Franc against all the major currencies. At the time of writing the Swiss Franc has appreciated against the Euro by over 14 % since the announcement. At the same time, to offset the monetary tightening that occurs when a currency appreciates, the SNB also cut its deposit rate by 0.5 % to a record -0.75 %, extending further the limits that interest rates can go to. 
In their accompanying statement the SNB cited the weakness of the Euro and Swiss Franc against the US Dollar as a reason to change policy, concluding that ‘enforcing and maintaining the minimum exchange rate for the Swiss Franc against the Euro is no longer justified.’ In the press conference later Thomas Jordan, President of the SNB, also said the weaker oil price was a positive economic development for the Swiss economy.   
The full implications of this move are yet to be realised but with deposit rates moving even further into negative territory, it is fair to say that the demand for investment products that can reliably produce positive returns will continue to be very strong.

Latest News

European ETFs raised USD47.8 billion in Q1, a 15 per cent increase compared to the same period in 2023, according..
LSEG Lipper’s March report finds that globally equity ETFs (+EUR113.2 billion) enjoyed the highest estimated net inflows for the month,..
Morningstar has published a review of the European ETF market for the first quarter 2024, which finds that it gathered..
ETF data consultant ETFGI reports that assets invested in the global ETF industry reached a new record of USD12.71 trillion..

Related Articles

Kristen Mierzwa, FTSE Russell
Index Investments Group (IIG), a division within index provider FTSE Russell, has extended its range of indices through two new...
US ETF issuers of active ETFs are facing an increase in fees from the big custodian firms, such as Charles...
Taylor Krystkowiak, Themes ETFs
Themes ETFs opened its doors in December 2023, with an introductory suite of 11 ETFs – seven thematic and four...
Konrad Sippel, Solactive
At the end of March, financial index specialist, Solactive, published its 2024 annual report on future trends.  ...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by