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China will capitalize on the euro’s decline
Financial Post: On Jan. 15, the Swiss Central Bank abruptly announced the end of its “bail-out-buying” scheme, wherein it spent high-value Swiss francs in exchange of weak euros. Formed in 2011, this currency peg was intended to prevent the Swiss franc from rising to the high value the market would otherwise place upon it. The Swiss were protecting their exports and holding off what might have been an indigestible excess of inflowing foreign money capital. Among other things, they did not wish to be the safe haven vis-a-vis the Euro. The plan was expensive. By the end of 2014, Switzerland’s accumulation of “excess” euros caused SNB’s foreign-exchange reserve to balloon to €174 billion. Read more.
