Analysis-Swiss franc shines as investors scramble for safe assets
© Reuters. FILE PHOTO: A projection shows a 100 franc banknote in a window in Zurich, Switzerland December 16, 2021. REUTERS/Arnd Wiegmann/File Photo
"Markets are caught between a rock and a hard place, with a surge in risk aversion where bonds provide no protection," said Florian Ielpo, head of macro at Lombard Odier Investment Managers in Geneva."Where do you express that risk aversion when you can't express it in bonds?"The euro dropped to 0.9419 francs on Friday, its lowest since the Swiss National Bank scrapped the franc's peg to the euro in January 2015, down about 2.4% against the currency so far this month.
ING currency strategist Francesco Pesole said the next big level for euro/Swiss franc was 94 with a near-term move to 93 possible given heightened geopolitical tensions. Since late 2022, it has been buying francs to prop it up, reducing the inflationary impact of rising costs of commodity imports.
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