The dollar may be a safe haven by default. The yen is less likely a safe have given its current recession. The only safe haven choice is to hold small high quality currencies like the Swiss franc.
This is a worry for businesses in Switzerland and all well managed small countries. It is not clear that it can handle further currency increases, yet exports and the economy is thriving. The SNB has tried to keep a loose monetary policy, but that has not caused investors to avoid the Swiss franc. Any tightening to slow domestic growth and inflation may make the franc more attractive to foreign investors. Intervention has not worked. Switzerland may not have control of their currency.
No comments:
Post a Comment