Euro-franc exchange rate at multi-year low due to financial market turbulence
Published: Monday, Aug 5th 2024, 11:00
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The very positive mood on the stock markets has turned into the opposite. Prices are falling sharply worldwide and safe investments are therefore in greater demand again. The Swiss franc is benefiting from this.
"In really uncertain times, investors turn to the tried and tested, and that includes the franc," says one trader. However, Swiss franc bonds and gold, which are considered safe, are also posting price gains.
The euro is currently trading at 0.9323 after 0.9378 francs on Friday evening. The single currency even briefly traded at 0.92107 francs - the lowest it has been since the minimum euro exchange rate was lifted in January 2015.
The dollar, which is also considered a safe haven, also fell to 0.8497 francs from 0.8595 francs at the end of the previous week. The greenback reached its low for the day so far at 0.8448 francs. In January, however, it traded slightly lower at 0.8417.
The reason for the sharp rise in investor nervousness is economic and interest rate concerns. On Friday, a weak US labor market report fanned uncertainty as to whether the US economy is facing a hard landing after all.
The Fed may have waited too long to ease monetary policy, according to the market. This threatens to stifle the economy. Recently, more and more economic figures have been published in both the US and Europe, signaling a slowdown in the economy.
Added to this are the geopolitical tensions. There is a threat of further escalation, particularly in the Middle East, which will lead to rising oil prices and therefore pose an additional threat to the global economy.
The economic data from the US due this afternoon should provide further insight into the economic situation in the US. The much-noticed ISM purchasing managers' index for the services sector in July is due.
©Keystone/SDA
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