Swiss francThe Swiss franc fell from its record high levels against the other major currencies today, as the country’s central bank takes extreme measures against the franc’s appreciation.
The Swiss currency retreated from its record maximum levels against the US dollar, the euro and the Great Britain pound today. It also decreased from the 3-year high vs. the Japanese yen.
The currency reacted sharply to the Swiss National Bank decision to reduce the target range for the 3-month LIBOR from 0–0.75 percent to 0.0.25 percent. The central bank’s statement also says that the bank will “very significantly increase the supply of liquidity to the Swiss franc money market over the next few days” (that is, a currency intervention). The bank intends to increase its sight deposits from the current CHF30 billion to CHF80 billion. In addition, the statements cites the worsening of its global economic outlook:
The Swiss National Bank (SNB) considers the Swiss franc to be massively overvalued at present. This current strength of the Swiss franc is threatening the development of the economy and increasing the downside risks to price stability in Switzerland. The SNB will not tolerate a continual tightening of monetary conditions and is therefore taking measures against the strong Swiss franc.
USD/CHF rose from 0.7646 to 0.7769 as of 8:56 GMT today. EUR/CHF went up from 1.0849 to 1.1083. CHF/JPY fell from 101.12 to 99.38.
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:
Swiss Franc on Record Against Everything (2011-08-01)
New Record of Franc Against Euro (2011-07-18)
CHF Reaches Record vs. USD, EUR & GBP (2011-07-14)
New Worries Return Demand for Franc (2011-07-09)
US Employment Improves, Reducing Need for Swissie (2011-07-07)
This entry was posted on TopForexNews on Wednesday, August 3rd, 2011 at 8:57 am 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 allowe
