For those of you traveling to Switzerland, you just woke up and found your money will buy you 17% less. In an announcement that completely surprised the financial markets and business community, the Swiss National Bank announced a “decision to abandon the franc’s cap against the euro, two days after an official reaffirmed it would remain a pillar of policy”. [Good to see that a banker’s word is his bond unless it is a few days later]
The franc appreciated 17 percent to 1.02569 per euro at 8:37 a.m. New York time after earlier jumping 41 percent to 85.17 centimes, the strongest since the euro’s 1999 debut. The Swiss currency gained 16 percent to 87.66 centimes per dollar, after touching 74.06 centimes, the strongest since August 2011.
This is an incredible move in an exchange rate where a 1% move in daily exchange rate is regarded as a big move.
The Euro was also impacted by this news where it dropped a further 1.8% on the news where it is ~1.16. Some financial pundits are predicting Euro will be parity with the dollar in 2015.
We say 2015 will be a good time for Americans to visit Europe. If you don’t mind the odd riot or two.