Investors around the world are paying very close attention to currencies to include the Swiss Franc, or CHF exchange rate. For many countries, forecasters are providing optimistic updates so now the question is, “what are forecasters saying about the Swiss Franc look like at this point in the game”. The economy has not been kind to most countries although some have fared better than experts could have imagined.
Okay, specific to the Swiss Franc exchange rate, we want to address updates on forecasting. In the summer of 2009, forecasters believed that a number of central banks might consider alternative options to help boost the economy, which came after news of the Swiss Franc taking a serious drop. When that happened, rumors began circulating that the Swiss National Bank was actually sold as a way of weakening the Swiss Franc.
Keep in mind that the method of selling currencies as a way of weakening them is nothing new and in fact, this is a method used to support exports. Of course, the Swiss National Bank has not been the only bank to make bold moves to offset the stimulus for the economy. For instance, the Bank of England and the Bank of Canada were doing the same thing as the Swiss National Bank.
By mid-summer of 2009, forecasters had been watching the Swiss Franc for several months, which began when word came out that the Swiss National Bank made comment that foreign currencies would be purchased to support the bank. However, after this, a number of other speculations were circulating regarding interventions. The Swiss Franc had long been a strong currency but for Switzerland, a country responsible for over 50% of its gross domestic product being exports, the shakeup was disconcerting.
Now that 2009 has passed, people want to know what forecasters are saying about the Swiss Franc for 2010 and beyond. Forecasters are now stating that for the next 12 months, the Swiss Franc will average 1.07 when compared to the US dollar. Although some experts believe the Franc may increase a little more, perhaps as high as 1.18, others believe it will hover more around 0.96.
The good news is that using the 1.07 average for the Swiss Franc exchange rate compared to the US dollar, this produced 3.8 basis points higher than seen in January of this same year. Even though the 1.07 currently associated with the Swiss Franc is still nine basis points down from one year ago, things could be worse. This shows that at least on a short-term basis, the Swiss Franc versus the US dollar is beginning to climb.
This means that when comparing the Swiss Franc to the US dollar, forecasters show that the short-term trend is positive and if numbers continue to increase, by the end of March 2010, the Franc could be as high as 1.11 or more. Remember, when looking at the average exchange rate for the Swiss Franc over a 10-year period, the average was 1.33 so if the new average for 2010 hits 1.07 or higher, then forecasters believe this is a strong indicator that within the next 24 months, the market for the Swiss Franc could be extremely stable.
Related posts: