Swiss Franc to Strengthen as Investors' Temperament for Risk Falters

The Swiss franc strengthened against most of its major currency counterparts throughout the week as investors continued to lower their appetite for risk, and may pick up additional gains over the following week as the lack of stability in the financial sector heightens the appeal of the low-yielding currency.

Swiss Franc to Strengthen as Investors’ Temperament for Risk Falters

Fundamental Outlook for Swiss Franc: Bullish

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The Swiss franc strengthened against most of its major currency counterparts throughout the week as investors continued to lower their appetite for risk, and may pick up additional gains over the following week as the lack of stability in the financial sector heightens the appeal of the low-yielding currency. Meanwhile, the franc tumbled lower against the U.S. dollar and the Japanese yen this week, and may fall further against the two currencies as the interest rate differentials favors the greenback and the yen.

The recent selloff in the global equities market have certainly played a key role in driving price action in the currency market, and further declines in stock prices should continue to benefit the Swiss franc. Fading demands for high-yielding assets paired with increased fears of a global recession should continue to fuel bullish sentiment for the Swissie, and the currency may once again reap the benefits of its safe haven status over the following week as the flight to safety continues. Despite the downturn in the domestic economy, the Swiss Franc is expected to turn a blind eye to the fundamental event risks scheduled for next week as broad based volatility throughout the financial market continues to drive price action in the forex market. - DS

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