Swiss franc remains near lows against euro

The Swiss franc remained near its recent lows against the euro, which bought 1.6090 francs in trading on Monday. Dealers are expecting continued strength in the European single currency over the next few sessions.

The Swiss franc remained near its recent lows against the euro, which bought 1.6090 francs in trading on Monday. Dealers are expecting continued strength in the European single currency over the next few sessions.

However, the euro-franc story since the single currency’s introduction one year ago has been one of stability. It is this stability though which could lead to a further weakening of the franc.

Interest rates in Euroland are two per cent higher than in Switzerland and analysts believe that could hurt the franc. “The longer the rate remains stable, the more Swiss investors question themselves about why they should be happy with two per cent less yield than in the euro”, said Marcus Allenspach, economist at Cantrade Private Bank.

Adding to the Swiss franc’s woes, is the “optimism for Euroland, and the chance of even higher interest rates there”, according to Marcus Allenspach.

On Sunday, the European Central Bank forecast a bright economic outlook for the euro zone. It said the economic outlook is the best it has been for 10 years.