UBS’s Richest Clients Chase After Dollars and Scrap Swiss Franc
From the Desk of Jim Eccleston at Eccleston Law Offices:
Last week, the Swiss National Bank abolished the franc’s three year-old cap of 1.20 per euro, which caused the currency to soar as much as 41 percent against the common currency. Moreover, the central bank made its deposit rate more negative, underscoring Europe’s divergence with the U.S., where the Federal Reserve is considering an increase in borrowing costs.
This move has caused UBS to lower its forecast for Switzerland’s economic growth in 2015 to 0.5 percent, from 1.8 percent, because of the “substantial impact” of a stronger franc on the economy. Also UBS has cut its 2015 inflation rate forecast for Switzerland to a consumer price decline of 0.6 percent, from an earlier estimate of a 0.2 percent gain. The estimates are subject to “substantial uncertainty,” depending on how the franc trades against the euro.
UBS private-banking customers also are concerned that stronger Swiss Franc will hurt Switzerland’s economy and the businesses they own.
Meanwhile, the U.S. is considered as the safest and strongest story in terms of economic growth, corporate earnings and potentially U.S. dollar appreciation. The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, rose 11 percent last year, the most since the gauge’s inception of Dec. 31, 2004.
The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.
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Tags: Eccleston Law Offices, James Eccleston, Swiss National Bank, Swiss Franc, UBS
