Switzerland keeps its cap on the franc

Dollar and Euro Currency

The Swiss central bank stated it will maintain its cap on the franc at 1.20 per euro, making the euro sink 0.82% against the Swiss franc to €1.227.

Jonathan Loynes, Chief European Economist at Capital Economics, suggested that the Swiss National Bank (SNB) would enforce the cap with the ‘utmost determination’.

“Nonetheless, a continuation or escalation of the eurozone crisis (as we expect) could see renewed upward pressure on the franc, forcing the SNB to follow through on its pledges of further action,” added Loynes.

Switzerland’s Economics Minister Johann Schneider-Ammann recently admitted at a press briefing that the Government was largely in the dark over what the future holds for the country.

“We don’t know what will happen in the coming months and Swiss economic growth in coming quarters could range from moderate, through stagnation to negative,” stated Schneider-Ammann.

At the end of November, the SNB announced that it planned to buy unprecedented levels of foreign currency in a concerted effort to drive down the value of the Swiss Franc, which surged in popularity recently. If this trend continues it could lead to buyers having to pay more for Swiss products in the future.

Only a few weeks ago, a leading property agency said that the Swiss luxury property market was cited as one of the fastest growing sectors in Europe.

Transfer money to Switzerland

If you are looking to invest in Switzerland, think carefully about how you will be transferring money to Switzerland. Foreign currency exchange rates quoted by banks are usually worse than the exchange rates available through specialist currency dealers, which means they are probably not the best way to send money abroad.

So if you are sending money to Switzerland, which you will inevitably have to do if you are looking to make a property investment, be sure to compare the market before you buy your overseas currency.

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