Prepping for the Great Euro Unloading
There's a myth in the financial market about how one should avoid getting on the wrong side of a central bank. Most people believe that, when a big government institution like a central bank wants to move asset prices, their deep pockets assure this is possible. While it is certainly true that central banks have the power to sway the markets in the very short term (think one to two days), in the medium term this type of intervention has been met with more failure than success. That's because there's usually a good reason why the currency was moving in the undesired direction.
One exception, however, is the Swiss National Bank. When the European sovereign-debt crisis first started, investors in Europe were looking to dump eurozone assets and park their money in a safer, more stable economy. With a strong AAA rating, geographic proximity, low unemployment, a relatively healthy economy and tight management of their fiscal finances, Switzerland was on the top of everyone's list. Demand for Swiss francs was so strong in 2011 that the currency's value rose 25% against the euro in a matter of months....324 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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