Franc Falls Versus Euro as SNB Attempts to Prevent Appreciation

The Swiss franc fell versus the euro on the speculation that the central bank was performing the selling of the currency to prevent its excessive appreciation because of the slowing economic recovery.

Earlier
Jean-Pierre Danthine, the Governing Board member of the Swiss National Bank, stated that policy makers are determined to prevent “any excessive appreciation” of the franc. He also admitted that the SNB is unable to carry on the buying of the foreign currencies indefinitely. The Swiss policy makers have started to sell the currency the last year to prevent deflation and to bolster the economic rebound.

The speculation suggests that the producer and import prices were rising, demanding another moves from the officials. The analysts think that Switzerland has the ability to outperform the Eurozone, therefore potentially the franc shouldn’t be weakening against the euro in a long run.

EUR/CHF traded at about 1.4366 as of 16:57 GMT today up from the opening rate of 1.4342. USD/CHF traded near 1.0513 after opening at 1.0536.

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