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FXSwitzerland
Reports9 January 2018
CHF: Keep the hedging cost low
The Swiss National Bank welcomed last year’s depreciation of the Swiss Franc and has even downgraded its description to being ‘highly’ instead of ‘significantly’ overvalued. So, where is the CHF headed next?
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Executive summary
- Expect Swiss National Bank to out-dove the ECB in order to widen hedging costs, since SNB notes that Swiss pension funds have been increasingly hedging offshore investment.
- The central bank might face some challenges in the form of better Swiss activity – yet low Swiss CPI should provide cover for the SNB.
- Left-field risks exist if Switzerland falls foul of US Treasury currency manipulation laws. Goods surplus of US$20bn with the US could see all three criteria met.
This report is part of our 2018 FX outlook published December 2017
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This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more