The central bank canceled its policy of pegging the Swiss franc at 1.20 to the euro, a policy that’s been in place more than three years to keep the currency from getting too strong and hurting the economy.
The Swiss National Bank also cut interest rates deeper into negative territory to help cushion the blow and make the Swiss franc seem more unappealing since low rates are bearish for currencies.
But those low rates didn’t deter traders from piling into the franc. After the announcement, it surged almost 30 percent, flying to a record high. The reason for the Swiss decision: It was getting very expensive for the Swiss National bank to defend that 1.20 level.
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