As the Swiss National Bank gives up trying to hold down the value of the franc, the European Central Bank and US Federal Reserve are set to release their latest policy announcements and investors should keep their eye on both the US dollar and the gold price, according to investment platform provider AJ Bell
“The franc soared after the Swiss National Bank abandoned its peg to the euro but the US dollar remains strong against every other currency, as does gold,” says Russ Mould, AJ Bell Investment Director. “Gold has been ignored of late but over the past year it is up by 2.6% against the dollar, 11.0% against sterling and 21.4% against the euro. The precious metal is seen as a haven during periods of deflation and inflation, while it could also benefit further if markets begin to lose faith in central banks' ability to control the markets – and questions may be asked after Switzerland's failed, three-year attempt to devalue the franc.”
Notes for Editors
- The trade-weighted dollar index is up by 14.5% over the past year while gold is up against all major currencies bar the Swiss franc over the same time period.
- A spreadsheet and charts showing these performance figures in greater detail are available on request.
- The Governing Council of the European Central Bank meets in Frankfurt on Thursday 22 January. The markets are expecting the launch of a Quantitative Easing programme.
- The US Federal Reserve meets on 27-28 January in Washington DC. The markets expect no change to interest rates or additions to the Quantitative Easing scheme concluded last October.
- Although gold trades well below its all-time high of $1,900 an ounce the metal rose from $1,241.8 an ounce to $1,274.6 between 16 January 2014 and 16 January 2015.