In a surprise move that caught the world’s senior banking level off guard, Thomas Jordan, the Swiss National Bank’s (SNB) powerful governor has resigned his role at the Central Bank and simultaneously announced the launch of a private fund named CHFHEDGE, Forex Magnates has learned.
The announced size of the fund is about $1 billion – which coincides with the loss sustained by the FX industry consequential to the unexpected removal of the CHF/EUR floor that sent the FX markets into turmoil in January.
As a reminder – in January the SNB, contrary to its own repeated announcements removed the floor of the CHF/EUR pair, resulting in massive panic and subsequent losses to the institutional and retail markets.
Mr. Jordan has declined comment, but his recent public statements may have given an indication for this abrupt move. “We believe that our credibility would have been savaged if we had postponed the decision into the summer, with a huge increase in the balance sheet but exactly the same result,” he told CNBC earlier this month, referring to the infamous removal of the cap.
Forex Magnates’ reporters have obtained copies of the said hedge fund’s presentation and Jordan is quoted as saying, “we are launching an aggressive but very conservative hedge fund as I don’t like surprises.”
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“Given my experience of the Central Bank decisions,” Jordan continues, “it only makes sense for me to become involved with a fund that is trading based on those very same decisions, as I’m sure I can minimize trading risk. For instance, if we take a sizable position in the euro we will simultaneously sell that very same position, thus fully hedging unexpected Central Bank announcements.”
Anonymous investors that were contacted by Forex Magnates stated that “we decided to invest in CHFHEDGE spearheaded by Jordan. A considerable amount such as this gives us a double advantage: firstly, Jordan has significant experience in this market and secondly by removing him from the SNB, we are fully equipped to anticipate its decisions ” Another investor simply said, “it takes one to know one.”
Two employees reporting to the fund’s senior compliance officer have confirmed that the fund will be barred from trading the Swiss Franc or managing any CHF-denominated assets for 18 months.
Interestingly enough, Forex Magnates has learned that a number of market participants who suffered substantial losses from Jordan’s January decision have now teamed up to develop an aggressive algo-trading strategy that will trade against his CHFHEDGE fund. A leading brokers’s CEO (that has asked to remain incognito) triumphantly announced, “it’s a golden opportunity for us to take back what’s ours!”
While documented findings back this news report, it should be noted that some of the sources speaking with Forex Magnates may have been motivated by business interests, personal animosity, or, more probably, a healthy knack for an April Fools’ hoax worthy of its name.
Happy April Fool’s Day from Forex Magnates!