Is it worth investing in Swiss francs in 2024?
The Swiss franc is one of the most stable currencies in the world, and it is the currency most often chosen by national banks to store their gold and foreign exchange reserves.
This makes the franc a good asset for preserving capital in times of uncertainty and geopolitical instability.
Over the past few years, the Swiss franc has appreciated significantly against major world currencies, making it more attractive to investors.
But everything changes, in times of economic instability, will the Swiss currency be able to maintain its position throughout 2024?
There are a number of factors that could influence the Swiss franc's exchange rate in 2024. On the one hand, the Swiss economy, like the economies of many other countries, is under pressure from inflation and geopolitical events.
Arguments in favor
Stability. The Swiss franc is one of the most stable currencies in the world. It is not subject to sharp exchange rate fluctuations like some other currencies. This makes it a good asset for preserving capital during economic instability.
Security. Switzerland is a neutral country, not involved in military conflicts, and the Swiss banking system is considered the most secure in the world.
Low inflation. Inflation in Switzerland remains low, despite the global crisis. This means the purchasing power of the Swiss franc remains relatively stable.
High interest rates. Currently, the Swiss Central Bank's (SNB) interest rates are at their highest in 15 years. This approach makes the currency more scarce and expensive, creating the conditions for its growth.
US dollar problems. The instability of the American currency is forcing investors to seek alternative, more stable assets for capital preservation. Gold and the Swiss franc are traditionally considered such assets.
Arguments against
Inflation. Inflation is rising globally, including in Switzerland itself, and this could lead to a weakening of the Swiss franc.
The weakness of the Swiss economy. The Swiss economy, like the economies of many other countries, is under pressure due to the strong exchange rate of the national currency and geopolitical events.
A fairly high exchange rate. The Swiss currency has now reached its all-time high against the US dollar and the euro, making Swiss goods expensive on the European market. It remains a big question whether the franc will appreciate further or whether the Swiss government will begin to curb its excessive appreciation.
Overall, investing in Swiss francs in 2024 could be a good idea, especially as an alternative to the US dollar. This way, you'll have peace of mind knowing your savings are invested in the world's most reliable currency.
The optimal option would be to create a currency portfolio in which the franc will occupy a significant share.
Today, there are several options for investing in the Swiss franc:
- Invest in Swiss francs directly by purchasing them on the foreign exchange market. To do this, you need to open an account with a broker .
- Indirectly, by buying shares of Swiss companies or Eurobonds linked to the Swiss franc.
- ETFs , which invest in Swiss francs, are traded on various exchanges around the world.
- In online banking, your bank, if it is possible to keep money in Swiss francs in your bank account.
The choice of a specific investment strategy depends on your goals and investment profile. However, purchasing cash currency is highly discouraged, as the Swiss Bank regularly changes Swiss franc banknotes. As a result, you could lose money when exchanging old-style banknotes for new ones.
