The Swiss franc shines as a refuge amid Trump's new tariffs

Source: CritpoTendencia Original Title: The Swiss Franc Shines as a Safe Haven Amid New Trump Tariffs Original Link: The Swiss franc has strengthened its role as one of the main safe-haven currencies worldwide, particularly after the recent tariff escalation driven by former U.S. President Donald Trump.

As markets absorb an environment marked by greater uncertainty and new tensions over global trade, investors are beginning to reorient their positions toward assets considered more stable in the face of volatility and increased risk.

Strengths of the Swiss franc in times of turbulence

Unlike other currencies such as the dollar or the Japanese yen, the Swiss franc has been particularly favored by episodes of risk aversion. Its recent appreciation against the main currencies of the G10 reflects investors’ confidence in Switzerland’s political and fiscal stability.

In this regard, market analysts highlight that the franc maintains a close correlation with gold and relies on structural fundamentals that are difficult to replicate.

Goldman Sachs’ chief currency strategist, Kamakshya Trivedi, notes that the low level of debt, predictable monetary policy, and the country’s political neutrality reinforce its status as a safe haven compared to other traditional assets.

This performance against the dollar, euro, and yen in recent months results from a combination of factors, including prudent fiscal policy, a sustained current account balance, and an inflation target close to zero.

In times of high uncertainty, the franc has historically offered more consistent protection and even better daily returns than the yen.

Latent risks in a safe-haven asset

However, betting on the Swiss franc during crises is not without risks, especially due to the possibility of interventions by the Swiss National Bank (BNS).

In this regard, the monetary authority has a long history of measures aimed at curbing the currency’s appreciation to protect the competitiveness of the export sector, a factor that can introduce episodes of unexpected volatility.

Still, the consensus among analysts suggests that, in scenarios of high risk aversion, the franc would continue to maintain its advantage as a safe-haven asset.

This view is supported by its market performance, as since May 2020, the currency has appreciated more than 80% against the Japanese yen, a behavior that confirms global investors’ preference for Switzerland’s financial stability.

The Swiss franc in an uncertain global environment

Looking ahead to the coming months, the combination of unpredictable economic policies in the United States, sustained growth of public debt in Japan, and Switzerland’s structural resilience reinforce the attractiveness of the franc as a refuge.

Even considering that the SNB might intervene to contain excessive appreciation, market consensus continues to indicate that the currency will maintain a central role in scenarios of financial tension.

In an still fragile international environment, geopolitical uncertainty and abrupt market movements continue to drive demand for defensive assets, a context in which the Swiss franc consolidates as a preferred option for investors seeking to preserve value and reduce exposure to risk.