June 23 (Bloomberg) -- The Swiss franc, the best-performing major currency in the past year, is competitive even after setting records against the euro, according to Deutsche Bank AG’s Alan Ruskin.
“You’re seeing the trade balance remarkably resilient, you’re seeing exports remarkably resilient,” Ruskin, global head of Group-of-10 foreign-exchange strategy at Deutsche Bank in New York, said today in a Bloomberg Television interview on “Surveillance Midday” with Tom Keene. “So the Swiss franc is not nearly as overvalued as a lot of people think.”
Switzerland’s currency has benefited from the nation’s role as a stable, neutral financial center and as an exporter of precision products from watches to machine tools.
The franc has appreciated 17 percent in the past year among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The currency rallied today to a record against the euro.
Switzerland’s trade surplus increased to 3.31 billion francs ($3.95 billion) in May, from 1.44 billion francs in the previous month, the Federal Customs Office in Bern reported today. A measure of exports dropped 1.5 percent, while imports decreased 8.4 percent. Exports account for 50 percent of Switzerland’s economy.
The franc has surged 32 percent against the dollar in the past year and 14 percent versus the euro, making it biggest winner among the most-traded currencies tracked by Bloomberg. The Swiss currency was little changed at 83.85 centimes versus the dollar today and appreciated 0.8 percent to 1.1953 versus the euro after touching 1.1846, the strongest level since the shared European currency began trading in 1999.
The Swiss franc may reach levels that discourage exports of the nation’s pharmaceuticals and watches, according to Ruskin. Right now, however, the currency is holding up “shockingly, shockingly well,” he said.
--Editors Dennis Fitzgerald, Dave Liedtka
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