PostedMay 14, 2022, 12:43 p.m.
The dollar goes up at full speed and is once more on par with the franc. As a result, products purchased at favorable prices abroad should soon cost more in Switzerland.
It may be more complicated to have several sellers for a single product and therefore to bring online competition into play.
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The pressure on the Swiss franc is increasing. For the first time in almost two and a half years, the US dollar is worth as much as our national currency. The dollar has thus gained 14% once morest the franc since its lowest level in January 2021.
However, in times of crisis as currently with the war in Ukraine, the franc is considered a safe haven and should therefore appreciate. But our currency would still be overvalued by 10% once morest the dollar, and even 50% once morest the euro, according to Mark Astley, co-CEO of Millennium Global Investments.
Lack of interest in Switzerland
What is going on? The Swiss National Bank (SNB) is keeping its key rate at its lowest, while the US Federal Reserve (FED) is increasing its interest rates as never in twenty-two years. The FED thus wants to fight at all costs once morest the extreme price increase in the United States, explains Karsten Junius, chief economist of the bank J. Safra Sarasin, to our colleagues from “20 Minuten”. Suddenly, for investors, investments in the United States are much more interesting because there is interest there, while in Switzerland they are negative, explains Karsten Junius. Not to mention that the United States is less affected than Europe by the economic consequences of the war in Ukraine.
The dollar will therefore strengthen further once morest the franc, says the Sarasin expert. The euro might also strengthen further in the coming weeks, as EU central bankers also announced a hike in key rates. The SNB, on the other hand, remains silent and, according to Karsten Junius, will probably not move before the fall.
Towards a rise in prices due to Asia too
Consequence for consumers: if it was previously possible to profit from cheap products from abroad, these will now become more expensive due to the weakness of the franc. At Digitec Galaxus, one-time price increases are expected if the dollar remains strong for an extended period. But there would be only a small part of the product assortment that the e-merchant or vendors pay in US dollars.
The problem also comes from the supply chains which are disrupted and the transport costs which are high, explains for his part a spokesman for Brack. Especially low-margin products, which are not in stock and ordered from Asia, might become more expensive, he said. We can expect a higher price increase due to delivery problems in China, also confirms the boss of Steg.
Difficult to compete
E-business professor Ralf Wölfle from the University of Applied Sciences Northwestern Switzerland expects prices to adjust quickly in Switzerland due to the strong dollar. As many items are in short supply anyway due to bottlenecks due to supply chain issues and raw material shortages, the availability of goods is a boon for traders. That’s why they have little reason to charge low prices, he explains.
For consumers, it is no longer so obvious to quickly obtain a desired item from several suppliers and thus be able to compare prices. “If you want to save money, you have to be flexible in the choice of model and, if possible, choose one for which there is price competition,” he advises.
( Fabian Pöschl/cht)