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A Note on Currency Hedging of Dollar Investments of Swiss Investors 1974-2025

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  • Kugler, Peter

Abstract

Our econometric (cointegration) analysis of the Swiss franc US dollar exchange rates over the period 1974 – 2025 provides strong evidence for a negative bias of the forward rate as predictor of the spot rate for the years up to 2007, which disappears with data from 2008 onwards. This implies that hedging increased the expected Swiss franc value of dollar investments before 2008. This advantage of hedging disappeared in the last 15 to 20 years and hedged and unhedged dollar investment have the same franc expected value in the long run.

Suggested Citation

  • Kugler, Peter, 2026. "A Note on Currency Hedging of Dollar Investments of Swiss Investors 1974-2025," Working papers 2026/02, Faculty of Business and Economics - University of Basel.
    • Handle: RePEc:bsl:wpaper:2026/02
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    More about this item

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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