Swiss franc hit an 11-year high against the U.S. dollar after rising 3.5% year-to-date and about 12% over the past year, data shows via Tradingview. Investors moved into the franc as a safe haven amid rising geopolitical risks and shifting trade policies.
Martin Schlegel, chairman of the Swiss National Bank, linked the move to global uncertainty during the World Economic Forum. “Further escalation, geopolitically, means more uncertainty,” he said.
The currency’s strength complicates domestic monetary policy and could force the bank to sell francs and buy foreign assets to cool the currency. “It’s not good for the Swiss franc or for Switzerland, because the Swiss franc is a safe haven. Whenever there is uncertainty in the world, the Swiss franc appreciates, and this makes monetary policy more complicated for the Swiss National Bank,” Schlegel added.
Analysts note demand for Swiss exports is relatively price-inelastic, supporting the franc, said Giuliano Bianchi of Quantitas Institute and EHL Hospitality Business School. The U.S. dollar has weakened, with the DXY index near 95 and unable to reclaim 110 (Ed. note: DXY measures the dollar against major currencies).
