Crisis may strengthen Swiss franc

The Swiss franc may rise against the euro as the financial crisis spreads throughout the global economy, reducing foreign investment in favour of domestic assets, according to BNP Paribas.

The franc will strengthen about 14 per cent to 1.43 to a euro by the end of the first quarter and to 1.34 at the end of 2009, according to Hans-Guenter Redeker, the chief currency strategist at BNP. It was at 1.5287 against the euro as of 11:21 am On Wednesday in Zurich.

The franc climbed 5.2 per cent against the euro since Lehman Brothers Holdings collapsed in mid-September as the banking crisis spread, rocking consumer and business confidence, prompting job losses and infecting industries such as auto-making. Gains by the currency may accelerate amid signs that the global recession is deepening, Redeker said.