News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/9S5tXIs3SX https://t.co/efGjwnJaKm
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Gold: -0.12% Silver: -0.30% Oil - US Crude: -1.23% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/b9pJgSOH8O
  • RT @Yeap_IG: #IGMorningthoughts: - 89% of #SP500 companies outperformed earnings thus far, but only 0.2% gain in SP500 since start of earni…
  • Gold prices risk forming a "Double Top" pattern - #GOLD chart https://t.co/pxGxpBTGPA
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.01% 🇪🇺EUR: -0.05% 🇨🇭CHF: -0.10% 🇨🇦CAD: -0.14% 🇦🇺AUD: -0.17% 🇳🇿NZD: -0.17% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/W36DdxonII
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 92.87%, while traders in Wall Street are at opposite extremes with 74.32%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/RKCkZLF5Pw
  • Keppel Corp is seeking to buy Singapore Press Holdings (SPH) for S$2.2 billion following the spin-off of its media assets, and plans to delist and privatize the company - BBG
  • S&P 500 Futures Lift Nikkei 225, Regulatory Risks Hit Chinese Stocks https://www.dailyfx.com/forex/market_alert/2021/08/02/SP-500-Futures-Lift-Nikkei-225-Regulatory-Risks-Hit-Chinese-Stocks.html https://t.co/bBmLaL5aHB
  • 🇰🇷 Markit Manufacturing PMI (JUL) Actual: 53 Previous: 53.9 https://www.dailyfx.com/economic-calendar#2021-08-02
  • Heads Up:🇰🇷 Markit Manufacturing PMI (JUL) due at 00:30 GMT (15min) Previous: 53.9 https://www.dailyfx.com/economic-calendar#2021-08-02
Swiss Initiative Proposes Sovereign Money System; Posing Risk to Franc

Swiss Initiative Proposes Sovereign Money System; Posing Risk to Franc

Peter Hanks, Strategist

Talking Points:

  • Initiative proponents claim that only 10% of current money supply is from the Swiss National Bank
  • The sovereign money scheme intends to protect tax-payers from bailing out banks
  • Swiss National Bank Chairman Thomas Jordan warns the move would damage Swiss economy
  • If implemented, the system may pose significant risks to the Franc’s status as a safe-haven currency

Learn the number one mistake traders make when trading. Download our Traits of Successful Traders Guide in the Beginner section of the DailyFX Trading Guides page.

The proposal facing Swiss voters on June 10th aims to have money created by the Swiss National Bank instead of the current system where money is created electronically by commercial banks. Supporters for the initiave claim the system would make the Swiss banking system more secure and less complicated, citing that only 10% of current money supply is from the Swiss National Bank. Similarly, they argue adopting the system would avoid dangerous asset bubbles and free tax payers from the prospect of bailing-out banks if threatened with collapse. While the system has been proposed in Iceland and the Netherlands in years past, it has yet to be adopted. Swiss National Bank Chairman Thomas Jordan stands opposed to the new scheme.

The chairman cited a multitude of reasons for his opposition, with the most prominent being the uncertainty the new system would pose for the Swiss economy. Although the chairman conceded the proposal’s intentions were noble, he went on to say “acceptance of the initative would plunge the Swiss economy into a period of extreme uncertainty.” He then added, “Switzerland would have an untested financial system that would differ fundamentally from that of any other country, this would create turmoil on the financial markets even before its implementation.” The move could also restrict the supply of credit to households, making borrowing more expensive and potentially slowing business growth.

As we look to concrete effects, any uncertainty surrounding the Franc and the Swiss economy would undoubedtly put the currency’s safe-haven status in question. However, a survey collected this week shows the vote is poised to fail with 49% against the measure – while 35% are for it and the balance undecided – a reason for cautious optimism among Franc holders. Year-to-date, the Franc has given up ground to the Euro, currently resting in the range between 1.1900 and 1.2000. On a larger scale,EUR/CHF stands on the cusp of fully recovering ground lost following the dramatic removal of the SNB’s primary monetary policy tool (the 1.2000 floor on EUR/CHF) back in January 2015.

Chart 1: EUR/CHF Daily Chart 2018

Euro vs. Swisss Franc Daily Chart

Chart 2: EUR/CHF Weekly Chart 5 Year

Euro vs. Swiss Franc Weekly Chart

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES