The Swiss Franc, Japanese Yen and the US Dollar are all set to make gains against their peers as investors give riskier currencies such as the Australian Dollar and South African Rand a wide berth, geopolitical tensions rose as Ukraine mobilised its military to oppose Russia after President Vladimir Putin declared that he has the right to invade.
Events in the region escalated over the weekend as Russian troops effectively took control of the Crimea and the interim government of Ukraine declared the move as an act of war. The United States and other Western nations warned Russia that it would become economically isolated if it went on to invade the rest of Ukraine.
As a result of the events, safe haven currencies including the Swiss Franc found favour. The Franc rose to its highest level in over a year against the Euro. The EUR/CHF climbed to 1.23, testing the Swiss National Bank’s commitment to defend its 1.20 per Euro cap on the Franc.
“It’ going to be a classic flight to quality move. The market is more focused on the extent to which Russia is willing to press their case and how escalated the conflict becomes. They just want to make sure that if there is some big move that has bigger implications that they’re not caught on the wrong side of it,” said a strategist in a phone interview with Bloomberg.
If the situation deteriorates in Ukraine then we can expect the Franc to continue strengthen against its peers. The Japanese Yen is also expected to press higher.
Current Swiss Franc (CHF) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Swiss Franc,
,US Dollar,1.1360 ,
Swiss Franc,, Pound Sterling,0.6792 ,
Swiss Franc,,Euro,0.8250 ,
Euro,,Swiss Franc,1.2125 ,
Pound Sterling,,Swiss Franc,1.4724 ,
[/table]
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