European "currency wars"

March 18 2015


  • Daniel Murray (EFG Asset Management)

  • Anezka Christovova  (Credit Suisse)

  • John Plender (Financial Times)

  • Lena Komileva (G+ Economics)


When the President of the SNB, Thomas Jordan, announced that the central bank would abandon its long-standing policy of holding the Swiss franc below its SF1.20/€ ceiling, all hell broke out – and not just in Switzerland. The immediate result was a 28% appreciation of the SF, though it has since drifted back down to almost SF1.06/€. And then the pressure shifted to the other significant currency that is de facto pegged to the euro: the Danish krone. Now, speculators are mounting an attack on the Swedish krona – and I am sure that there are other currencies already on their radar.

What officialdom can do when pressure on a currency is upward is limited. However, we now have negative interest rates in both Switzerland and Denmark – and top Swiss corporates are able to raise 10-year money at pretty much 0%.

This is new territory, but – with the euro subject to a battering every time ‘Grexit’ appears on the horizon – it looks like it is going to hang around for a while. What are the implications? Is it, on balance, a good or bad thing? What responsibilities does a bank have towards the markets in its currency (if any)? And where will speculators turn next?

 These are legitimate questions – as are concerns about the macroeconomic impact of FX volatility. We are, therefore, delighted that (with the help of our friends at the British-Swiss Chamber of Commerce) we have been able to pull together a distinguished panel to give the various issues a public airing:

  • Daniel Murray is head of research at EFG Asset Management and chief economist at EFG Private Bank. He was formerly an economist at Smithers, Merrill Lynch and Russell Investments. He has a PhD in Economics and was the 2009 winner of the CFA UK’s Wincott Prize.
  • Anezka Christovova is the lead FX strategist in London for Credit Suisse. She covers the G10 currency universe with main focus on the Swiss Franc. Anezka joined Credit Suisse in 2010.
  •  John Plender has been a senior editorial writer and columnist at the Financial Times since 1981. He served as financial editor of The Economist between 1974 and 1980, before leaving to join the Foreign Office’s policy planning staff. John also chairs the CSFI’s Advisory Council.
  •  Lena Komileva is the chief economist and managing director of G+ Economics. Lena was previously senior vice president and global head of G10 strategy at Brown Brothers Harriman, and director and global head of G7 market economics at Tullett Prebon. She has also been an adviser to ACI, The Financial Markets Association and the World Gold Council.