Is it the right time to convert CHF --> EUR?

Hello everyone

As you know since the conflict in the Ukraine the CHF/EUR exchange rate changed to 1:1 for 1-2 days and is now at 0.99 EUR for 1 CHF. The last time we had such a ratio was 2015.

My question is: is it the right time to convert CHF into EUR?

My biggest concern is the infaltion rate in EURO area which was 7.5% in march compared to Switzerland with 2.4%.

I’m planning to invest a bunch of Euros within the next 1-2 years into a house. So no one has a crystal ball to see what happens in future but I would be interested about some opinions whether it’s wise to change the money now than later.

Thanks in advance!

I have no crystal ball. A higher inflation in the euro zone than here in Switzerland could continue to weaken the EUR against the CHF. Inflation could also lead to higher house prices.

I personally would change the money, once you closer look at houses. But I guess only the future can tell you, if thats the smartest move.

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I did buy some euros when CHF/EUR was 1:1. My gut feeling is that the SNB will intervene again if CHF/EUR drops further below 1.0, trying to protect the Swiss economy / export business sector and countering currency safe haven speculations. Therefore I think it’s a great time to buy EUR if you are going to spend it short-mid term, otherwise inflation might be problematic.

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I think the Euro will further weaken. The current sanctions will hit very hard the economy. Of course, the CHF can also weaken, but I would say Euro will more

I don’t know what you should do or what will happen, but I can tell you what I did.

I sold recently >77k EUR in CHF and USD because I was tired to see the exchange rate dropping year after year , even though I had an account @ 2.5%.

I sold almost everything (rate around 1.038: just before the war)
→ I kept 3-4 k for vacations and triathlon training camps in the eurozone that were coming and planned
→ 5-6 k in BTC / ETH
→ I sold all the rest in CHF and USD . (I didn’t want to go above the 50k CHF limit on IB , all the rest I sold in USD . Since I already had CHF cash i can’t tell you the exact ratio)
→ I invested 20-30 % already in Swiss and US ETF and will do the rest later this year

I could maybe have sold my EUR progressively but I wanted to stop watching the exchange rate . Just to be done with it.

I don’t know if what I did is any good but personally I am satisfied.

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If you mean by “inflation” the consumer price inflation, it’s the other way round: when new money flood the market, first house (at other asset’s) prices begin to climb, then eventually consumer prices join the party. It’s called the Cantillon effect.

Interessting comment, I had to google the Cantillon effect. As far as I understand it, it doesnt necessarely mean what you stated. My understanding of it is, that those who can access the “new money” first, will profit the most. Dependent on the spending of those “ealry receiver”, house prices might increase, decrease or remain the same.
In addition, inflation is measured by the CPI, but their cause are explained by different economic views/theories (monetarists vs. keynesians).

Exactly. And you see that effect well in real estate and stock prices since 2009. The rich know how to profit from the new money. Later, the poor get the bill when buying food (it’s clear now at least in the USA).

We are about to buy a property in the Eurozone and need to transfer CHF to EUR. the timing is right now but looking at different options to convert CHF → EUR I am undecided between Wise and Revolut. I haven’t used either and they look like the 2 best options. Any experience or recommendation?

(looks like I’d need a premium account in Revolut to transfer large amounts)

Interactive Brokers…

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hmmm never thought about that. so the flow would be:

  1. from my CHF bank account to IB in CHF
  2. convert from CHF to EUR in IB
  3. transfer to my EUR bank account in country of destination

any challenges expected on step 3 since IB does not know this account? Any additional KYC processes that would cause delay?

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The destination account should be in your name. Otherwise no problem expected. You can try with a small amounts first.

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I did it many time and it is the best spot rate and lowest exchange fee (2usd for 25 k).
You will save 150-200 usd compare to Revolut premium for a lot of 25 k.

Just providing an update here. I followed the IB path and it worked well. Best rates even if it takes longer than Revolut or Wise. Definitely worth it for large amounts and if you plan it and are not in a rush it is the best option

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Yeah, you literally exchange the currency pair… It’s not even a rate, but rather the real price :smiley: and the 2CHF are well worth it, especially for amounts >10K