…wouldn’t you just buy the hell out of the CHF?
Investors were buying it last week with negative real rates. Wouldn’t they just by all the more if the Swiss adopted the ECB’s 1.5% interest rates? If you are given the choice of CHF or EUR, which would you choose? The SNB hopes you will just go look for greener speculative pastures and leave the franc alone…
I’m not 100% sold that the peg will work over the medium-term but it certainly has put a short-term floor under EUR/CHF and USD/CHF.
