The Swiss franc rose today as the euro advanced on positive Forex traders’ mood. The Swissie was higher against the US dollar and the Japanese yen and remained flat versus the currency of the eurozone.
The franc was moving in the lockstep with the euro for almost the whole time since it reached the cap set by the Swiss National Bank. In practice, the ceiling became a peg in everything but a name. That may hurt the Swiss currency as the expected interest rate cut from the European Central Bank this week would likely send the euro down. For now, though, the shared 17-nation currency rose and the Swissie followed.
Thomas Jordan, the Chairman of the Governing Board of the SNB, repeated that he considers the cap a positive measure for the economy of Switzerland. He said in an interview:
At the moment the minimum exchange rate is the right response for Switzerland to the crisis. Otherwise we couldnât fulfill our mandate of maintaining price stability while taking due account of economic developments. We would have negative inflation rates for a longer period as well as a recession.
USD/CHF fell from 0.9550 to 0.9525, while CHF/JPY advanced from 83.21 to 83.73 as of 21:23 GMT today. EUR/CHF traded at the opening rate of 1.2008.
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