High Yielders Look To Swiss Franc

August 2008 | Market Strategy

We are still attracted to the high-yielding fundamentally strong Latin currencies on a medium-term basis. However, with the dollar looking as though it is finally embarking on a broad-based comeback, despite strong potential for a short-term sell-off, we are looking to the low yielding Swiss franc (where local interest rates are 2.75%) as a funding currency. The performance of the Swiss franc in recent years has been as superb as the dollar performance has been dismal, and we are growing increasingly confident that a medium-term reversal of fortunes is in the offing. Indeed, while some correlation is to be expected,

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