Swiss Franc Declines on Speculation of Further SNB Intervention

The Swiss franc fell 0.7 percent to the dollar and 0.4 percent to the euro by mid-day trading in London today. The franc’s decline is due to recent actions on the part of the Swiss National Bank to weaken the currency as well as speculation that further actions are pending. One monetary tool hinted at last week was the possibility of pegging the franc to the euro to prevent a further appreciation.

“The market appears to be reluctant to test the SNB’s resolve,” said Jane Foley, a senior currency strategist at Rabobank International in London. “But the SNB will have to come up with some major steps fairly soon. It can’t go on making an empty threat or the market will lose its patience and start piling into the franc again.”

Source: Bloomberg

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