Swiss equities have crashed after the country removed restrictions on its currency, sending it soaring in value against the euro.
Switzerland had imposed a ceiling on the value of its currency in 2011 to counter the huge amount of money flowing into the country as a perceived “safe haven” during the eurozone crisis.
But in a shock move this morning, the country removed that ceiling, which sent the value of the Swiss franc soaring by nearly 30 per cent compared to the euro, while it also appreciated against other major currencies.
The currency move rocked Swiss equities, many of which are multinational companies that generate much of their profits abroad and will therefore lose out translating those profits into Swiss francs.
The SIX Swiss Exchange is currently down 8.1 per cent and there are no stocks in positive territory this morning.
Among the worst affected companies are healthcare giants Roche and Novartis, and global bank UBS.
The move will affect Europe ex UK funds because just over 20 per cent of their main benchmark index is in Swiss equities.
However, funds domiciled in the UK should also benefit in the currency exchange from Swiss francs back into sterling due to the depreciation of the UK currency against the Swiss.
