Swiss franc will keep on climbing
The Swiss franc, a safe-haven for rattled eurozone investors, reached record highs against the dollar and the euro recently. And it looks set rise further.
The Swiss franc has reached record highs against both the dollar and the euro, having appreciated by almost 10% against the greenback in this quarter alone. You can see why it's so popular, says Fxpro.com's Michael Derks.
The dollar and the pound have been "deliberately debased" by their respective central banks through money printing. They "no longer represent a sound store of value". The appeal of the yen has been dented now that the economy is struggling with the aftermath of March's earthquake.
Worries over southern European states' solvency and a possible break-up of the eurozone make Switzerland's currency "the first port of call" for rattled eurozone investors, says Standard Bank's Steve Barrow.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
A current-account surplus and solid public finances are also buoying the franc, while the comparatively strong economy makes further interest-rate rises likely. "The Swiss franc has all the right characteristics" to appeal to foreign-exchange investors, says Kasper Kirkegaard of Danske Bank.
"It is difficult to see," agrees Derks, what will stop the currency rising further in the near term.
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
HSBC returns to cost-cutting plan
HSBC is set to revamp its commercial banking division – but will it come at a cost?
By Dr Matthew Partridge Published
-
UK ranked as ninth-worst country for property investment
High taxes and rising transaction costs have put pressure on the UK's buy-to-let sector. Is the UK still profitable?
By Chris Newlands Published