Switzerland is the home of many watch brands, and of most of the luxury ones.
On January 15 2015, the Swiss National Bank (SNB), decided to remove the currency cap on the Swiss Franc (CHF) which kept the CHF artificially low against the Euro (EUR). Investors buy CHF because they consider it as safe haven currency. Because the SNB suddenly will cease the practice of “printing” CHF to buy Euros to support the cap, the CHF appreciated significantly. Before the move by the SNB, CHF:EUR was hovering around 0.80. On January 15, CHF:EUR went past 1.17. As of the writing of this post (January 21 Manila time), CHF:EUR is trading at around 1.0. See CHF:EUR quotes here
This is bad news for the Swiss since exports comprise around 70% of their GDP. Swiss made watches, who many people think are already expensive, will now even be more expensive. Continue reading Overpriced Swiss Watches Become Even Pricier