2023-10-20 09:43:22
A safe haven, the Swiss franc is propelled by global crises, such as the resumption of the conflict in the Middle East in recent days. It has a high exchange rate once morest the euro, a situation which complicates the sale of Swiss products abroad.
The Swiss franc hit a new record this week: it only had to pay 94 cents for 1 euro at the close of the markets on Wednesday.
Just like gold, the Swiss franc is one of the ideal safe haven assets in the event of geopolitical tensions. Enough to explain that these two stocks have appreciated significantly in recent days. An upward trend that is not new.
Franc on the rise since the 1970s
Since the 1970s, the Swiss currency has continued to rise. Firstly because investors have become more cautious since the financial crisis and are favoring investments in Swiss francs. Another reason is that the Swiss economy has always shown itself to be resilient in the face of this phenomenon, thanks to its high value-added products such as “watches and certain pharmaceutical products”, explained Friday in La Matinale de la RTS, Luc Luyet, foreign exchange strategist at Pictet Wealth Management.
These products make the Swiss currency less sensitive to exchange rate fluctuations, he adds.
Euro falling since 2007
On the contrary, the euro has rather experienced a downward trend. Since its peaks in 2007, it has lost almost 80% once morest the franc. In question, the various crises which shook the euro zone and in particular that of the debt.
Old fears are resurfacing today with high debt levels in certain countries, such as Italy in particular, which weighs on the European economy and the single currency.
The exchange rate between the two currencies has therefore evolved in opposite ways. This is all the more significant in the event of a crisis, as is currently the case, since the Swiss franc is then propelled even further upwards.
Complicated for export
The strong franc is not good news for companies selling their products abroad, fears Samuel Vuadens, president of the Swiss Machinery Industry Association. “In two years, the euro rate has gone from 1.07 to 0.94. The entrepreneur must therefore find 12% to compensate and satisfy his buyer, which is enormous!”
“A subcontractor lost 30% of his turnover on recurring checkouts because he did not find this 12% from his buyer,” illustrates Samuel Vuadens.
>> Listen to the interview with Samuel Vuadens in La Matinale: The strong franc complicates the life of exporting companies: interview with Samuel Vuadens / La Matinale / 53 sec. / today at 06:27
Radio subject: Sylvie Belzer and Cléa Favre
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