The SNB released the EUR CHF fix. While the central bank might want to smooth out the effect, it is yet another indicator for investors losing trust in the European currency project. This is in alignment with Merkel’s statements on the Greek situation. She did not exclude Greece leaving the Euro and noted that the risk could be dealt with, even though the investment community has great doubt on that. After the Euro had lost significant potential against the USD, the Swiss national bank did reverse their decision to fix the currency against the Euro, causing substantial market movements.
Investors now need to assess the damage and consequences, which will take some time. The risk, that the Euro is under more severe pressure is very high, as it is under attack from several sides. Liquidity squeezes, bond market issues, lack of trust and a greater need for easy monetary policy put the whole common currency project under dark clouds.
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