What was the strongest currency in 2015

2015 goes down in the annals as the year of the Swiss franc shock

The Swiss franc has a reputation for being one of the strongest currencies in the world. This was once again confirmed in 2015. The year of foreign exchange was marked by three phenomena.

The price development on the international foreign exchange markets in 2015 was erratic at times and can essentially be described by three key phenomena. First, through the franc shock. It took place on January 15th. On this day the Swiss National Bank announced after lengthy, intensive interventions that it would no longer support the euro at CHF 1.20 per euro, but instead release it.

As a result, the Swiss franc rose by up to 41% against the euro in a price explosion against the euro that had never before been seen as solid currencies, before finally leaving the day's trading business with a plus of almost 21%. The erratic price development made it difficult at times to find counterparties in the “most liquid” segment of the international financial markets. At the same time, the one-month volatility of the currency pair “at the money” rose from 2.6% within two days to up to 33% before stabilizing at a higher level. The franc weakened somewhat against the euro in the course of the year, but only marginally.

Relative strength of the dollar

The second phenomenon in 2015 was the relative strength of the dollar. She showed up inter alia. in the development of the dollar index. The barometer, introduced in 1974, which is determined by the development of the dollar against the euro, yen, pound, Canadian dollar, Swedish krona and franc, rose by around 9% over the course of the year. The Swiss franc only contributed to this in so far as it fell by around 14% against the dollar from January 15, which roughly corresponded to the previous “appreciation shock”.

The third phenomenon was the persistent weakness of emerging market currencies against the dollar and the franc. Further falling energy and raw material prices and enormous structural problems in countries such as Brazil and South Africa had led to a continued flight of international investors from these regions. No wonder, then, that currencies such as the Argentine and Colombian pesos, the real, the rand and the lira have lost up to 36%.

Francs "doomed" to strength in the long term

Looking ahead, since the “shocking” appreciation of the currency on January 15, 2015, some people have made headlines out of the smallest price movements. In fact, it seems unlikely that something like this will happen again. Because the central banks talk to each other behind the scenes and want to avoid that. There are many indications that the franc will weaken somewhat in the short and medium term, but not dramatically. Because in the long term it is “condemned” to strength due to surpluses in external economic relations.

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