Some of the risk that has boosted the Swiss Franc is deflating. Germany’s grand coalition is now firmly on track, and US President Trump’s trade war is more likely a threat than a reality. Italy’s elections were somewhat indecisive, which means that a game-changing shift towards anti EU policy is not imminent. We remain negative on CHF against USD and EUR.
Meanwhile, the Swiss National Bank turned in bumper results for 2017: profit of CHF 54.4 billion, up 29% from 2016, with CHF 49.7 billion earned in foreign currencies and CHF 3.1 billion from gold holdings. The central and the cantonal governments will be cheering, because they will share a profit distribution of CHF 2 billion.
By Peter Rosenstreich