Recently, JPMorgan Chase, one of the largest American banks, in its material named the Swiss franc as the most stable and promising currency for investment. So over the past month, the franc has strengthened against the dollar by more than 2 percent and, according to the author's forecasts, will continue to strengthen over the next year.
What is the reason for the growth of the franc?
First of all, it is worth noting that there is actually no “growth” of the Swiss franc, and it is strengthening not because it is growing, but because other world currencies are falling against the background of major global economic shocks.
Thus, the main reasons for the "growth" of the Swiss franc are the global crisis associated with the coronavirus pandemic, as well as the Sino-American trade wars, but, frankly, the factors described above would not lead to such a situation by themselves, the main culprits as there are always the stock exchange and speculation forex brokers who massively began to invest in the Swiss franc, as the most stable currency in the world.
In the future, the recession will increase, and the economic decline will accelerate, which means that an absolutely stable franc will become even more attractive, and accordingly, its “growth” will become even brighter. For example, JPMorgan Chase experts predict that the franc will strengthen against the dollar by 3%, which is an extremely favorable situation for such stable currencies with practically zero annual inflation.
Are there alternatives to the Swiss franc?
Undoubtedly, given the diversity of the world economy and the variety of currencies existing on the market, an alternative like the franc simply could not but arise, because Switzerland is not the only economically stable state.
So, one of the alternatives may be the Japanese yen, because the Japanese economy, like the Swiss one, is characterized by high stability and a positive trade balance (difference in trade balance). But, it is worth noting that the Swiss franc wins the competition with the Japanese yen, because the trade balance of a long neutral state is almost three times higher than that of the country of the rising sun.
The Swiss franc, of course, is a rather promising investment object and is practically not associated with any risks, because even if the forecast does not come true, inflation will not eat up your capital, since its level is extremely low for the franc.