For several days the Swiss franc has been losing ground against the Euro. According to Bilan the franc came close to 1.10 against the Euro on 11 August 2015 before recovering to around to 1.085 on Thursday the 13th of August based on Reuters data.
According to Bilan experts are forecasting a return to 1.10 by the end of the year. Andreas Ruhlmann, an analyst at IG Bank interviewed by Bilan said the movement has been driven by falling stock markets. As leveraged stock market investors sell they need to repay their loans. Many of these loans are in Euros so more Euros are being bought than normal to repay loans so driving up the currency’s price relative to other currencies. This effect has been compounded by the number of investors who have sold the Euro short. Changes in Chinese monetary policy are also having an impact.
Le franc suisse chute face à l’euro: impacts et perspectives (Bilan – in French)
Important note: information provided in this article does not constitute financial advice and should not be taken as financial advice.