Swiss franc gained strength amidst negative market sentiment in the last few days, because:

- investors view Swiss franc as a safe-heaven currency in times of negative market developments

- the Swiss inflation and GDP growth forecast would justify a central bank rate hike in the end of this year or early next year, but as a result of worsening global economic outlook it might be postponed. The central bank can follow stricter monetary policy by allowing the franc to strengthen, which is happening at the moment. Investors calculate that this time it is unlikely that the Swiss central bank would weaken the franc by interventions, as it did until this spring. This expectation helps the Swiss franc.

Today the franc reached 1.3050 from 1.3175 against the euro, which is a historical record.

The abovementioned movements of the franc and the weak forint together resulted in an exchange rate of 218 forints for a Swiss franc, just one forint less than the 219 record in early July, increasing the burden of those who have taken out loans in Swiss franc, significantly."

Source: Portfolio Online Financial Journal