I was reminded of my old exchange-rate worries by the news on the Euro today. Here's the history of the pound against the Swiss Franc, Euro and Japanese Yen, starting from the time my wife and I moved to Geneva:
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| Screen capture from Google Finance. |
Every pay day I'd look at how much less my check was worth... and wonder why the Franc, sitting outside the shelter of the Euro, representing an economy focussed on banking could keep pace with it when the Pound could not.
Since we moved back to the UK at the end of 2010 it's become obvious that the Euro wasn't somehow protecting the Franc. The Franc has stayed stronger and stronger and today it's approaching the strength of the Yen of export-driven Japan.
What is the origin of this safe-haven status of Switzerland? Gold reserves? A middle-class well-mannered stereotype?
It's amazing how a currency can drop by 40%. How can this be based on reality?
If anyone has a good answer, please let me know!
hahaha love the title... taking cash out (CHF) of ATM was really painful for me as well :(
ReplyDeleteSwitzerland has a cracking economy and is not as reliant on banking and finance as is commonly thought. Play around with http://stats.oecd.org/Index.aspx?DataSetCode=STAN08BIS (select Country: Switzerland, and Variable: PROD) to get an idea of the breakdown of the Swiss economy. CHF is also, unlike the Euro, considered a "safe haven" currency, which increases demand for it in times of, erm, unrest and worry.
ReplyDelete@mt99 thanks for the interesting resource. It seems like Switzerland and the UK have a very similar reliance on the sector called "FINANCE, INSURANCE, REAL ESTATE & BUSINESS SERVICES", with both at just below 30%. The UK seems to have got there more recently though, with only 23% in 2000 compared to Switzerland's 27%. I guess that growth should come with an instability warning. I'll have to dig around on that site some more... Thanks again!
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