GAINESVILLE, Ga., Jan. 16, 2015 /PRNewswire/ -- The Swiss National Bank's unexpected decision to abandon its policy of capping the Swiss franc against the euro came as a shock to most. Effects are already being felt across the equity, currency and export markets.
According to Bloomberg, not one of the 22 economists they surveyed expected the SNB to get rid of its cap in 2015. Brian Whitmer of Elliott Wave International however was ahead of the move, forecasting the decision in December 2014: "Likewise, a significant move may be fast approaching in the Swiss franc (CHF) relative to the euro…. The precarious position of stocks calls for the euro crisis to worsen dramatically. As it does, mood will deteriorate, traders will sell euros and other weak currencies, and the SNB will abandon its peg in an effort to protect whatever valuable assets it has left."
Whitmer sees this surprise move as a sign of things to come in Europe: "Deflation will persist, and the world's most conservative central bank has merely loaded up on risky assets alongside everyone else." His forecast continues: "The SNB is attempting to maintain a currency peg that will become untenable once deflation and depression hit."
In his December 2014 report, Whitmer explains that the euro represents another key market that's gone from thriving to merely surviving. He called for a significant move in the CHF relative to the euro by looking at the recent jump in implied volatility – a measure of fear: www.elliottwave.com/wave/SNB.
Whitmer is the editor of the monthly Elliott Wave European Financial Forecast and contributes the European stock section of Global Market Perspective. Brian's analysis and forecasts have been quoted in European media outlets and he has been interviewed by notable U.S. media including Yahoo! Finance and Fortune.
Note to media: For a copy of the research referenced above, or to schedule an interview with Brian Whitmer, please contact Alexandra Lienhard at [email protected], 770-536-0309.
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SOURCE Elliott Wave International