(This is an excerpt from an article I originally published on Seeking Alpha on September 5, 2012. Click here to read the entire piece.)
{snip}
…something happened September 5th that finally had me rethinking my rediscovered, extended bearishness on the euro. The Swiss franc (FXF) suddenly came to life against the euro today, AND, most importantly, held its ground. It was a very small move to about 1.204, but the euro has not strayed this far from the artificial 1.20 floor set by the Swiss National Bank (SNB) for more than a day since a quick spike in mid-March.
When in June I wrote “It Is Not Over Until the Fat Franc Flies?“, I insisted that all rallies in the euro are meaningless until traders and investors are willing to release the tight grip on francs that keeps EUR/CHF pinned to the 1.20 floor. On Wednesday, the euro rallied against both the U.S. dollar and the franc, and, so far, at the time of writing, EUR/CHF has maintained those gains.
The excitement seemed to at least partially come from commentary from Swiss financial authorities suggesting that demand for the Swiss franc is finally easing. {snip}
Source: FreeStockCharts.com
With the fat franc starting to sing, I will become even more likely to head for the exits.
Be careful out there!
(This is an excerpt from an article I originally published on Seeking Alpha on September 5, 2012. Click here to read the entire piece.)
Full disclosure: net short euro, short AUD/CHF, long British pound