Swiss Franc Rapidly Approaching Parity With Euro
That is very extraordinary, given the fact that it only 14 months ago costed 1.4 francs to buy a euro and given the fact that for example a Big Mac costs nearly twixe as many Swiss francs in Switzerland to buy as one Big Mac costs in the euro area. The Big Mac is of course only one good, and can sometimes therefore be misleading in cost of living comparisons, but the OECD:s official PPP-estimate basically corrobarates this estimate as it says that the domestic purchasing power of the euro was 88% higher than that of the Swiss franc.
Given Switzerland's higher income level and the Penn/Balassa-Samuelsson-effect a somewhat higher price level could be justified. But when it is nearly double as high, the franc is clearly overvalued from a fundamental point of view.