How Did the Swiss Franc Trade in 2008?
2008 was the revenge of the low yielders. The Swiss Franc and the Japanese Yen were the best performing currencies of the year, followed by the US dollar, which only became the second lowest yielding currency in March. The fact that the Japanese Yen was the only currency to appreciate against the Swiss Franc indicates how much of an impact interest rates had on the currency’s performance. When the markets were nervous and economic climate is as uncertain as it was last year, investors rush out of high yielding currencies, which typically have more risk into lower yielding ones, which typically have less risk. This helps to explain the Franc’s 25 percent appreciation against the British pound, New Zealand and Australian dollars. Looking ahead, we could see more gains in the Swiss Franc, but that will be largely dependent upon the market’s risk appetite. Recession Expected in 2009 Like Australia, the global recession has yet to hit Switzerland, but in 2009, it may be difficult for the co
