Swiss Current Account Surplus Soars
Interestingly, all subcomponents strengthened. The trade surplus (both goods and services) rose from 9.8 billion swiss franc to 12.1 billion, and the factor income surplus rose from 10.1 billion to 12.6 billion. Even net transfers strengthened, from -3.0 billion to -2.5 billion.
To the extent a current account surplus reflects better investment return in other countries, it need not imply an undervalued currency. Yet real interest rates are no lower than in the euro area, and they are higher than in the U.S., so in this case the surplus does in fact reflect an undervalued currency.