Currencies shoots up equity investors' agenda as central bank policies diverge

A week of dramatic FX moves has highlighted the importance of currency positioning for global equity fund managers and fund buyers, as they try to cushion portfolios against the impact of multi-speed central bank policies.

Last week the Swiss National Bank (SNB) shocked investors by abandoning its attempts to hold down the value of the Swiss franc via its policy of capping the euro exchange rate at CHF1.20. Its actions caused the currency to rise as much as 30% against the euro and sent domestic stocks plunging as a result. The SNB's move was also viewed as another clear indication the European Central Bank (ECB) will embark on a quantitative easing programme in a bid to stave off deflation - possibly as soon as this week. Equity investors are having to factor in a number of considerations when revie...