January 15, 2015
SNB Removed One Franc for 1.20 Euro Floor
When a market trend and it will trend for sometime, as the market or policy will keep changing but will not change suddenly. This is especially true for currency policy, as a nation and its politic will NOT change every now and then unless at war. Of course the market will move up and down, as PA is moving in a zigzag manner even when it trend.
Thursday, 15 January 2017, SNB (Swiss National Bank) shocked markets by reversing a three-year-old policy; remove the floor and Swiss Franc (CHF) appreciated by 39%; the bank (SNB) has removed the Franc and Euro cap. The country (Swiss) had previously capped the value of the Franc at 1.20 per Euro to stable the currency. At that time (2008 and 2009) when confidence in the European economy was bad and the Euro Dollars declined against all currencies.
Forget the why first, and look at what has the policy reverse (change) affected the market or what’s the impact?
Immediate Impact
Just the immediate impact, we see 1), Alpari UK, one of the currency broker has folded. More on News by BBC, 2), FXCM shares suspended. In the same news. More to be affected! Will see.
Just in One Month
In one month, this is the second incident that impacted the currency market. If you can recall, the first was happened in December 15, 2014 (Monday) Russian currency collapsed by 10%.
Money Management
So, the lesson here is money management. You can right the wave, but the wave can sink you too. The SNB policy change is just like tsunami.
Links:
1) Alpari UK currency broker folds over Swiss franc turmoil – BBC
2) What Does The Swiss National Bank Know That No One Else Does? – Forbes
3) Rouble Rout Means Capital Controls Could Be On The Cards For Russia – BBC
4) Alpari UK important announcement! – Forbes
5) FXCM, Alpari (UK)
Thanks for visiting this extra ordinary site, AmiBrokerAcademy.com.
Moses
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