Asia-Pacific currencies and bonds rallied after the Swiss National
Bank stunned markets by scrapping its currency ceiling against the euro.
The SNB had adopted a currency ceiling in 2011 after massive inflows caused its value to surge. But with the euro losing more than 16 per cent of its value against the dollar in the past 10 months and the likelihood of the European Central Bank announcing a programme of "full-blown" quantitative easing as early as next week, the central bank explained that the ceiling was no longer needed.
The SNB also pushed its main deposit rate further into negative territory, by 50 basis points, to minus 0.75 per cent. This means banks must pay even more than before for the privilege of parking their reserves with the Swiss central bank, thus encouraging them to move their money elsewhere.
Read more Click Here / www.trade4x.net
The SNB had adopted a currency ceiling in 2011 after massive inflows caused its value to surge. But with the euro losing more than 16 per cent of its value against the dollar in the past 10 months and the likelihood of the European Central Bank announcing a programme of "full-blown" quantitative easing as early as next week, the central bank explained that the ceiling was no longer needed.
The SNB also pushed its main deposit rate further into negative territory, by 50 basis points, to minus 0.75 per cent. This means banks must pay even more than before for the privilege of parking their reserves with the Swiss central bank, thus encouraging them to move their money elsewhere.
Read more Click Here / www.trade4x.net
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