The US often complains about Chinese currency manipulation but there is only one slam-dunk case of FX manipulation in the world and that’s in Switzerland.
It’s been more than two years since the temporary floor at 1.20 in EUR/CHF was established and authorities in the US and elsewhere have never made a fuss about the open manipulation of the franc.
What did Switzerland give up in return for global silence on FX manipulation in one of the richest countries in the world?
Is it any surprise that since the cap’s removal the Swiss government has been taking steps to turn over tax cheats, improve transparency and eliminate numbered accounts? I don’t think so.
In any case, the argument for a EUR/CHF floor is collapsing. The October Treasury report on currencies said”economic growth in Switzerland is slowly reviving and deflationary pressures appear to be subsiding” and noting that its eurozone trading partners are facing disinflation problems of their own.
Combine that with Jordan’s comments today, a possible move to negative rates in the eurozone and it’s beginning to look like the EUR/CHF floor won’t survive 2014.
