An exchange traded fund pegged to the Swiss franc’s movements against the U.S. dollar rallied 6% on Tuesday after the Federal Reserve pledged to keep interest rates “exceptionally low” at least through mid-2013.
A flight to the Swiss franc shows investors remain worried about weakness in global debt markets. ETFs tracking gold, another safe haven, traded higher on Tuesday as well. [Gold, Silver ETFs Diverge Before Fed]
“The stock market is rallying but really nothing’s changed,” said Andrew Wilkinson, senior market analyst at Interactive Brokers, in a Dow Jones Newswires report. “In the background the risks to the global economy haven’t changed, which is why you see the Swiss franc so bid.”
The Swiss franc ETF set a new all-time high on Tuesday as was up 23.4% year to date heading into the session, according to Morningstar.
CurrencyShares Swiss Franc Trust
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Read the disclaimer: Tom Lydon is a board member of Rydex|SGI.