SNB Says Ready to Intervene Drives EUR Up

The euro strengthened after a Swiss National Bank official said it remained ready to intervene in markets, sparking broader gains for the shared currency.

The euro climbed against most major peers even as it fluctuated versus the franc. The yen rose against the dollar after Japan’s economy minister said neither the government nor the central bank has committed to a strict schedule for achieving 2 percent inflation. A gauge of the U.S. dollar was close to its highest level on record amid speculation Federal Reserve policy makers meeting this week will stick to their stance that suggests an interest-rate increase this year.

“The move on euro-Swiss is grabbing attention,” said Ian Stannard, head of European foreign-exchange strategy at Morgan Stanley in London. “It’s generating a bigger euro move. It’s unclear, but obviously there’s going to be a lot of discussion around what the SNB is going to do next. I don’t think there’s enough here to suggest any clear influence.”

The euro rose 0.6 percent to $1.1306 at 8:22 a.m. New York time after falling to $1.1098 on Jan. 26, the least since September 2003. The shared currency was little changed at 133.14 yen. The euro weakened 0.2 percent to 1.01747 francs after appreciating as much as 2.3 percent to 1.03826, the strongest level since the SNB lifted its currency cap on Jan. 15. Japan’s currency strengthened 0.6 percent to 117.77 per dollar.

The Bloomberg Dollar Index, a gauge of the currency’s performance against is major peers, slid 0.3 percent to 1,157.96. It closed at a record 1,161.42 in New York on Jan. 26.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza