Business · Markets · 9 hrs ago
French debt concerns renew demand for the Swiss franc as a safe haven
The Swiss franc strengthened against the euro after concerns about France’s budget problems unsettled bond markets.
On Friday, the euro fell below 93 Swiss centimes, after reaching almost 95 centimes on September 11.
Higher yields on French government bonds have raised fears of a wider European debt crisis.
Investors have moved money toward places they see as safe, including Switzerland.
The franc’s recent rise shows how quickly currencies can shift when crises worry markets.
Switzerland’s low government debt and relatively low inflation have helped support the currency over time.
For Swiss investors, a stronger franc can reduce the value of investments held in other currencies, especially bonds, unless they hedge the currency risk.
The sources say investors can look for products marked “CHF hedged” or consider Swiss shares.
The Swiss franc has strengthened against the euro as turmoil in France’s bond market renewed fears of a European sovereign debt crisis.
International investors have shifted more funds to places seen as safe, including Switzerland.
On Friday, the euro fell below 93 centimes, after the franc had reached a yearly low of almost 95 centimes on September 11.
The franc’s recovery has slowed a period of weakness that began in June, partly because interest rates elsewhere were higher than in Switzerland.
The article says Swiss investors holding foreign-currency assets face exchange-rate risks unless they hedge them.
- Who
- International investors have moved more funds to safe havens, including Switzerland.
- What
- The Swiss franc has strengthened against the euro amid concerns about French debt and a possible European sovereign debt crisis.
- When
- The latest shift followed recent turmoil in France’s bond market. The euro fell below 93 centimes on Friday.
- Where
- Switzerland and the euro-franc foreign exchange market.
- Why
- France’s budget problems have pushed up yields on its government bonds and raised fears of a sovereign debt crisis in Europe.
This story does not have two clearly opposing sides.
No direct quotes in the coverage so far.
A period of weakness for the Swiss franc began, partly as interest rates in other currency areas were higher.
The franc reached a yearly low of almost 95 centimes against the euro.
Turmoil in France’s bond market and fears of a European sovereign debt crisis prompted investors to seek safe havens.
The euro fell below 93 centimes against the franc.
- Franc’s yearly low
- Almost 95 centimes per euro on September 11
- Friday exchange rate
- The euro fell below 93 centimes
- Franc weakness
- Began in June
- Safe-haven destination
- Switzerland
Sources
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