“How about that Swiss franc?!?!”
The World Economic Forum in Davos, Switzerland kicks off next week. And it’s hard to imagine anyone not talking about the breath-taking surge in the Swiss franc.
Earlier Thursday, the Swiss National Bank announced that it will stop trying to cap the franc’s value against the Euro. Previously, it did not allow the franc to rise above 1.20 to the euro.
After the announcement, the franc surged as much as 14% against the euro. And via Bloomberg’s Matthew Campbell and Alex Webb, everything just got pricier in Davos:
“That means a Johnny Walker Blue at the Belvedere Hotel, the schmoozer’s hostelry of choice during the forum, would set you back the equivalent of $US41 today for the 36-franc whisky, about $US6 more than a nightcap yesterday. Across town at the Hotel Seehof, a bottle of 2004 Dom Perignon for those in a celebratory mood will cost about $US400, up from $US343 before the Swiss National Bank’s announcement.”
Davos is the highest city in Switzerland and is a popular ski resort, apart from being the host of one of the most prestigious annual business conferences. CEOs and others who attend sometimes take a few days extra for vacation.
But all that’s going to cost more than it did if they hadn’t finalised their travel plans and converted their currencies by yesterday.
As Business Insider Mike Bird reports, the implications of this morning’s jump stretches into the eurozone. People who earn in euros but have mortgages and other debt denominated in Swiss francs will now pay more that they used to.