Independent Strategy

Swiss aftershocks

The abandonment of the SNB’s currency peg versus the euro is a reminder of the deflationary forces stalking the global economy. It reopens the Swiss franc to investors as a safe-haven while rubbishing the notion that there is a zero-lower bound (ZLB) to interest rates. This will reinforce the appeal of any currencies that offer yield. We are shifting some of our long US dollar versus euro positions to long Swiss franc/euro. We also cut our short Kiwi dollar position, replacing this with long Australian versus the US dollar.

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