During the last two months of 2010, the Swiss franc (CHF) appreciated 4.5% against the U.S. dollar and 8.5% against the euro. Overall, the broader CHF index has risen approximately 7%. This strength is surprising as the CHF is generally considered a safe haven. Usually the Swiss currency gains when uncertainty and panic reign in financial markets and when asset prices are falling. As investors’ sentiment has become very bullish and asset prices are increasing, the CHF is therefore not supposed to strengthen.
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About the author:
Maarten Spek: Maarten Spek is a financial markets analyst specializing in interest-rate and currency developments within the G10 economies. He is co-author of ECR's publications on interest-rate and currency developments.
