UBS sees the problem in the euro exchange rate falling

UBS loses profit

In brief: Reducing the sharp exchange rate euro impact on the income of Swiss banks.

The collapse of the euro exchange rate has become an unpleasant surprise for UBS. Foreign exchange reserves of the Swiss National Bank fell by more than 14 billion Swiss francs (13.3 billion dollars) in the first half of this year, after the weakening of the euro triggered a reduction in reserves of the Bank. In the second quarter, the central bank lost 5.5 billion Swiss francs, while revenue in the first quarter amounted to 1.5 billion francs.

Meanwhile, the Bank’s representative refused to confirm these figures for the second quarter. The final results will be known on August 13. The Central Bank of Switzerland, headed by a Philip Hildebrand, was forced to buy billions of euros in order to prevent the franc to strengthen, reducing deflationary risks and protect the country’s economic recovery, export-oriented. While the central bank ended a policy of intervention in the past month, the currency reserves of $ 226.8 billion francs, leaving the Bank vulnerable to fluctuations in exchange rates. According to currency analysts, UBS, does not expect the resumption of intervention from the Central Bank of Switzerland to as long as Franco did not strengthen to 1.25 against the euro. Also in the central bank will keep pace with the strengthening of the national currency.

Igor Tringlers
2010-07-21 23:02, Economics.

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