Switzerland is back on the US Treasury Department currency watch list, one step shy of being labeled a currency manipulator. According to the 1988 Omnibus Foreign Trade and Competitiveness Act, the US Treasury Department has to conduct an annualized review to determine which country manipulates its currency to gain a competitive advantage against the US. The biggest drawback of being designated a currency manipulator by the US is the exclusion of US government procurement contracts. Updates are conducted every six months.

Safe-haven currencies such as the yen and the Swiss franc are under pressure on Monday morning amid expectations from politicians of new incentives that could reduce investors concerns about a slowdown in the global economy.  

What is the Essex Express and how does it impact forex trading? It is a commuter train which is shared by several key traders from different banks such as the Swiss bank UBS, the Japanese bank MUFG Bank and UK banks Barclays and RBS. Inside the train, they created a forex trading cartel in order to influence market prices. Another forex trading cartel created by traders on the Essex Express was the “Three-Way-Banana-Split” operated by traders from Swiss bank UBS, UK banks Barclays and RBS and US banks Citigroup and JPMorgan who collaborated in a chat room by that name.

Memories of the January 3rd 2019 Japanese Yen mini crash, which impacted the Australian Dollar as well, barely faded when forex traders are reminded that fluctuations in the world’s most liquid market can be drastic. The January 3rd mini crash and recovery didn’t leave any permanent damage and neither did yesterday’s mini crash in the Swiss Franc. The USDCHF initially spiked from 1.0004 to 1.0096, then reversed direction to dip below parity and eventually resumed its path to the upside.

Let’s backtrack a bit into forex history, not to long ago, the Swiss National Bank (SNB) had their currency pegged to the Euro with an exchange rate of 1.2000 in the EURCHF as a boundary. The SNB vowed to defend this level at all costs and interfere in the forex market with its vast currency reserves in order to prevent the exchange rate from dropping below the 1.2000 level.

The memories of Thursday, January 15th 2015 are still rather fresh and many may have not yet recovered from the day the Swiss National Bank decided to shock financial markets which wreaked havoc on the forex market.

The Swiss National Bank shocked global financial markets today as it abandoned is minimum exchange rate against the Euro which it introduced in September of 2011. This limit put a floor under the EURCHF at 1.2000 and the SNB has defended this level ever since then. This move was completely unexpected and no economists had forecasted the SNB to take this drastic measure.