What actually protects you from a currency crisis?

Buying Swiss francs is the obvious answer to a loss of confidence in the euro or sterling. It may also be the right one. But it helps to separate three risks that are getting bundled together: a French sovereign sell-off, a fall in the euro, and a fall in sterling. They do not have the same hedge.

France cannot devalue a French currency while it remains in the euro. A crisis can first appear as a wider spread between French and German bonds, weaker French banks and tighter local credit without producing a comparable fall in the euro. The ECB can also buy bonds under its Transmission Protection Instrument when it judges market moves to be disorderly and not justified by a country’s fundamentals.

That makes a long German Bund and short French OAT position a cleaner France trade than simply buying francs. It isolates the sovereign spread. It also brings margin risk, and ECB intervention could hurt it quickly. If the actual fear is monetary financing or a broader loss of confidence in the euro, the currency matters much more.

Match the instrument to the failureQualitative: how closely the trade tracks the risk named, not a return forecast.
CHF cash or very short Swiss debtDirect EUR or GBP fallThe SNB can intervene, and the policy rate is 0%.
GoldBroad loss of faith in fiscal currenciesNo cash flow. It can still fall when real yields rise.
Long Bund, short OATFrance-specific sovereign stressECB action, margin and basis risk. No protection from a euro-wide fall.
CHF calls or EUR / GBP putsA defined currency tail over a set periodPremium decays. The timing has to be broadly right.
Currency-beneficiary equitiesA weaker currency plus durable company earningsEquity, valuation and demand risk remain. Hedging can delay the benefit.

The clean hedge is usually the boring one

For money that may be needed in pounds or euros, CHF cash or very short Swiss government debt has the least company risk. The Swiss National Bank itself describes the franc as a safe haven. That label is not a free lunch. Its June policy rate was 0%, and the SNB said it was prepared to intervene against a rapid, excessive appreciation of the franc. A successful hedge can therefore provoke the institution that issues it.

Gold covers a different failure. It is useful when the worry extends beyond one country to confidence in fiscal currencies and central banks. It has no earnings or maturity value, though, and can fall when rising real yields make a non-yielding asset expensive to hold. I would treat it as a separate reserve asset, not a substitute for all cash.

Options are the most exact tail hedge. A CHF call or an EUR or GBP put can define both the maximum loss and the period covered. The cost is visible: premium decay. Being broadly right but six months early can still lose the whole premium.

An importer only wins if its selling currency holds

The importer idea is sound, with one condition. A company that buys goods in euros and sells them in francs or dollars gains purchasing power when the euro falls. A British importer from France is not much protection if sterling falls at the same time. Its input currency and its selling currency may simply decline together.

This is why the more useful screen is not “who imports from France?” It is:

  1. Which currencies determine revenue?
  2. Which currencies determine wages, factories and other costs?
  3. How much of that mismatch has management already hedged?
  4. Will lower import costs remain as margin, or be passed to customers through competition or regulation?
  5. Can the balance sheet survive the rise in yields that caused the currency move?

Public markets contain surprisingly few pure Swiss importers. The large food retailers that would show the cleanest effect are private. A listed Swiss healthcare distributor such as Galenica has domestic, essential demand, but regulated medicine prices can pass currency savings to customers. Its adjusted net debt also rose from CHF 424m to CHF 675m in 2025 following expansion, so “defensive” still needs a balance-sheet check.

In practice, euro exporters often have the clearer operating mismatch. Airbus and Safran sell a great deal in dollars while carrying substantial euro costs. The catch is important: both hedge years ahead. A sharp fall in the euro today may improve economics eventually, but the existing hedge book can postpone the benefit.

Company exposure is a balance sheet, not a flag
Potential beneficiary

Airbus

Around 75% of revenue is in US dollars. The unhedged cost base is mainly euros and, to a lesser extent, sterling.

Its USD 54.2bn hedge portfolio runs to 2030, so spot FX does not flow straight into profit.

Potential beneficiary

Safran

Estimated net dollar exposure is USD 16bn for 2026, supported by global civil-aerospace demand.

2026 to 2028 exposure is fully hedged at about EUR/USD 1.12. Any euro benefit arrives late.

Sterling shelter

RELX

North America supplied 58% of 2025 revenue and subscriptions supplied 54%. Sterling is not the core demand driver.

It is a sterling translation shelter, not a direct hedge against gilt losses or a UK recession.

Defensive, not a CHF proxy

Novartis

Drug demand is defensive and the company reports in US dollars.

Only 1% of 2025 sales but 17% of operating expenses were in CHF. A stronger franc is an operating headwind.

Defensive, not a CHF proxy

Roche

2025 sales rose 7% at constant currencies.

Reported CHF growth was only 2%. The strong franc absorbed most of the translated growth.

Mixed exposure

BKW

A domestic Swiss utility has essential demand and some CHF revenue protection.

Energy trading is largely in euros and the group uses forwards and swaps. It is not a simple imported-energy windfall.

Swiss pharma protects earnings better than it protects currency

Roche and Novartis still make sense in a defensive equity basket. Demand for important medicines is less sensitive to a recession than demand for aircraft, luxury goods or industrial equipment. That is company-level protection.

It is not the same as owning francs. Novartis reported only 1% of 2025 sales in CHF against 17% of operating expenses. Roche’s 2025 sales grew 7% at constant exchange rates but only 2% when translated into francs. If CHF rises hard, their Swiss cost bases become more expensive relative to much of their revenue.

Utilities deserve the same caution. Essential demand helps, but utilities often carry debt, trade energy across borders and hedge commodity and currency exposure. BKW says its energy trading is largely conducted in euros and that it uses currency forwards and swaps. A utility can be defensive while still being a poor way to express a rapid CHF appreciation.

The cleaner UK analogue is a London-listed company whose economics are already in harder currencies. AstraZeneca reports in dollars. RELX earned 58% of its 2025 revenue in North America, and 54% of group revenue came from subscriptions. If sterling falls, those earnings may translate into more pounds. Neither company hedges a gilt loss directly, and valuation still decides whether the shares are a good trade.

How I would rank the choices

For a small, deliberate hedge against euro and sterling weakness, I would start with direct CHF exposure and a smaller gold allocation. Options belong only where the premium and expiry are acceptable in advance. A France-specific position belongs in the OAT-Bund spread, not in a vague “Europe is in trouble” basket.

Equities come last in the hedge stack. They can compound and may produce the best return if the currency move is gradual, but they add business and valuation risk exactly when the aim is to remove risk. Airbus, Safran, RELX, AstraZeneca, Roche and Novartis are useful research candidates for different reasons. None is a substitute for the currency itself.

The strongest falsifier is straightforward. If French spreads widen but the euro holds, CHF does less than the France-specific bond trade. If the euro falls but global demand also collapses, exporters may lose more from volume than they gain on translation. And if the SNB intervenes aggressively, even the direct CHF hedge can disappoint.

Sources

Working draft. This is research, not investment advice.