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2021/10/21 / Erste Group Research

Global uncertainty strengthens the franc

In mid-October, the EURUSD reached almost 1.15, its lowest level since the summer of 2020. A countermovement then brought the euro to over USD 1.16. However, the EURUSD remained outside the trading range that had held since around summer 2020. The technical picture thus shows risks for a firmer dollar.

After the recent phase of strength (triggered by the threatened insolvency of Evergrande), the yen has again weakened significantly against the euro since the beginning of October. Due to Japan’s heavy dependence on imported fossil fuels (covering 88% of primary energy demand, according to the IEA), the yen has come under pressure from the sharp rise in fossil fuel prices against the euro.

In recent trading weeks, uncertainty on the global financial markets has increased due to several factors (including the threat of Evergrande’s insolvency and the historically strong rise in energy prices). This led to a strengthening of the franc against the euro to an exchange rate level of 1.07.

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General information

AuthorErste Group Research
Product nameForex News
Topic in focusFX, Macro/ Fixed income
Economy in focusEurozone, Japan, Switzerland, United States
Currency in focusEuro, Swiss Franc, US Dollar
Sector in focus-


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