Swiss francThe Swiss franc slumped today against all major currencies as Swiss National Bank Vice President Thomas Jordan suggested that a short-term peg of the nation’s currency to the euro could be legal.
The SNB was attempting to weaken the Swiss currency for several years. So far such attempts were futile. There is a difference this time, though, as a peg wouldn’t have just one-time effect as the previous interventions, but would put a continuous pressure on the franc. It looks like Switzerland’s central bank is ready for unconventional measures and such measures can help the bank to achieve its goals for making the franc’s strength less threatening to the country’s economy.
The potential weakening of the Swiss franc can pose an interesting question (in case the SNB would be able to achieve such weakening, of course): what currency can be considered a safe haven? The yen is also under pressure of interventions, while the dollar doesn’t look that safe. Perhaps investors, interested in safety, would shun the Forex market altogether.
USD/CHF surged from 0.7263 to the daily high of 0.7687 today before trading near 0.7617 as of 21:01 GMT. EUR/CHF climbed from 1.0296 to 1.0843. CHF/JPY slumped from 105.72 to 100.88.
If you have any questions, comments or opinions regarding the Swiss Franc, feel free to post them using the commentary form below.
Earlier News About the Swiss Franc:
SNB Moves In, Franc Moves Back (2011-08-10)
Fed Plans Keep Zero Rates till 2013, Dollar Hurt (2011-08-09)
CHF at New Record vs. USD, Gains vs. Other Currencies (2011-08-08)
Intervention: Way to Weaker Franc or Bluff of SNB? (2011-08-08)
Swiss Franc Prevails Despite Intervention (2011-08-04)
This entry was posted on TopForexNews on Thursday, August 11th, 2011 at 9:01 pm and is filed under Swiss Franc. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.
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