Exploring the Relationship Between Exchange Rates, Trade Balance, and Geopolitical Instability in Switzerland

Abstract

This paper studies the complex relationship between geopolitical factors, foreign exchange rates and trade balances in Switzerland from this regard. Analyzing the status of Swiss franc as a haven, this study confirms that it has an established positive relationship with intensified geopolitical instability. Adjusting economic indicators effective exchange rates and real interest adjust, the research revealed that despite global insecurities, Switzerland remains resilient with steady economic growth balanced balance of payments for financial stability. The results not only fit into those debates on safe-haven currencies, global production networks but also the role of geopolitical events in influencing financial markets offering helpful information for policy makers and businesses as they continue to thrive in a highly interdependent world.