Der Franken ist weiterhin ein sicherer Hafen – dies zeigen die Sorgen über Frankreich und eine mögliche Euro-Schuldenkrise

The Swiss franc has slightly weakened against the euro in recent months, but investors should exercise caution when investing in other currencies or hedging the currency risk. As the school holidays have begun, European holidaymakers planning trips to Eurozone countries have benefited from slightly more affordable travel. Since hitting its lowest point of nearly 95 rappen per euro on September 11, the franc has strengthened again.

On Friday, the euro dropped below 93 rappen. The situation in France, with its budgetary problems, has caused increased fear of a sovereign debt crisis in Europe, prompting financial market participants to move their money to perceived safer locations, such as Switzerland. The recent decline in the euro-franc exchange rate suggests that international investors continue to view the franc as a safe haven.

The ongoing phase of the Swiss franc's depreciation, which began in June, seems to be easing, in part due to higher interest rates in other currency areas and a widening gap. The recent strengthening of the franc against the euro highlights how quickly the winds can change in foreign exchange markets, and the impact crises can have.

These situations are far from uncommon today, with conflicts in Iran and Ukraine, the erratic policies of American President Donald Trump, or the high debt levels of many states potentially causing investors to flock to safe havens like the franc. Experts from J. Safra Sarasin Bank warn that this could lead to an overshooting of the euro-franc exchange rate.

Over the past decades, the Swiss franc has continuously appreciated against other currencies, and this trend may continue due to Switzerland's monetary and fiscal stability, low public debt, and relatively low inflation rates. For investors and wealth building, this means that Swiss private investors with investments in other currencies risk consistently losing money if they do not hedge the currency risk, especially for bond investments.

However, the situation is less clear-cut for equity investments, as financial theory suggests a certain balance over time. Private investors who want to avoid currency risk should check if the term "CHF hedged" appears in the product name, or invest in products that track Swiss equities. A preference for domestic securities seems justified given the strong franc development.

The downward pressure on prices has increased, with inflation briefly dipping slightly to -0.1 percent in May, suggesting the possibility that the SNB may lower the benchmark interest rate further. At zero, the SNB's benchmark interest rate remains unchanged in Switzerland. However, Ernst Baltensperger warns against excessive deflationary fear. The new National Bank president, appointed seven months ago, is now facing a tough situation.