Color me skeptical of talk of raising the CHF peg. To my mind, raising the peg does nothing but make it more profitable for speculators to test the resolve of the SNB…
If the shite hits the fan in Europe (default, withholding of any aid tranche to any indebted country, discovery of more hidden debts, etc…), the market will buy CHF like there is no tomorrow to force the SNB to capitulate just like the BOE did in 1992. Yes, I realize that the SNB is selling, not buying its own currency, but they have a breaking point. Mr. Market just has to find it…
We’re back down to 1.2125.
