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On long AUD/CHF
Receive about 4% p.a. on AUD
Pay about 2% p.a. on CHF
Make about 2% p.a. on rollovers
On 100, 000 AUD/CHF long
200 points p.a. +/- capital gain or loss
Worth the risk?
I prefer to look at negatives first
Cons
Australia's current account deficit, (per person about the same as USA)
Switzerland’s current account surplus
Switzerland’s safe haven status, (worse case: markets close over weekend, nuclear bomb, AUD/CHF opens much lower Monday)
Pros
Interest rate differential
AUD/CHF trending up
EUR/CHF trending up
Switzerland is readily losing its tax haven/bank security status, (i.e. banks and government are starting to give out information, OECD tax taskforce)
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