Initial thoughts on the Swiss National Bank peg removal

The Swiss National Bank’s announcement that it had decided to scrap its floor for the Swiss Franc against the euro is the biggest thing to hit the foreign exchange market since the UK and Sweden were booted out of ERM. This is a very big deal and its implications are as yet unknown. I think there will be non-Swiss repercussions. Denmark and Sweden are particularly relevant but also Greece. Overall, the violent moves post announcement suggest that a eurozone breakup would result in a strengthening of whatever currency unit Germany is a part of. Initial thoughts below

The Swiss National Bank’s announcement that it had decided to scrap its floor for the Swiss Franc against the euro is the biggest thing to hit the foreign exchange market since the UK and Sweden were booted out of ERM. This is a very big deal and its implications are as yet unknown. I think there will be non-Swiss repercussions. Denmark and Sweden are particularly relevant but also Greece. Overall, the violent moves post announcement suggest that a eurozone breakup would result in a strengthening of whatever currency unit Germany is a part of. Initial thoughts below
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