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Citi: CHF to weaken in 2014

Citigroup economists expect the Swiss franc to stay highly attractive as a funding currency in 2014. CHF is seen 35% overvalued versus the US dollar.

According to the median estimate of more than 40 analysts surveyed by Bloomberg, Swiss franc will post the biggest loss versus the US dollar, falling by 8% from 0.9100 to 0.9800. Most economists expect CHF to depreciate even faster than the yen in the coming year.

Swiss franc and the Japanese yen have been traditionally used as funding currencies in the carry trade operations as SNB and BOE interest rates are bound to zero. 

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