A rocky ride for the Swiss franc this week
ZURICH, SWITZERLAND – The Swiss franc lost 4 percent Thursday against major currencies, in the wake of remarks by central bankers that it could be pegged to the euro, according to Daily Markets. Reuters at 16:30 Swiss time shows the franc trading at euro 1.0872, compared to 1.03 a day earlier at market closing. It was trading at $.7625 and £1.2344.
The resistance of the Swiss franc, which has toyed with euro parity this week, to going lower is prompting Swiss National Bank (SNB) officials to publicly mention the possibility of a temporary pegging of the Swiss franc and the euro. Such a move would be designed to stabilize prices, SNB board members Thomas Jordan and Jean-Pierre Danthine have told Swiss newspapers Tages-Anzeiger and Le Temps in the past two days, possibly preparing the public to accept such a move.
Jordan points out, however, that such a move could be only temporary, as it runs counter to the SNB’s mission.
Core inflation figures and better-than-expected retail sales in February are behind a strong rise in the Canadian dollar, popularly known as the loonie, and it is now nearly at parity with the US dollar, reports the Globe & Mail in Canada.
Good or bad news, depending on which you are spending, buying: Swiss franc, dollar rates
Zurich, Switzerland (GenevaLunch) – The US dollar has slipped below parity with the Swiss franc for only the second time. The dollar fell below the franc 14 March 2008.
The Swiss franc, which has climbed in the past two days, was at 1.0030 against the dollar ($0.9993/CHF1 ) at 17:00 in Zurich Wednesday 25 November, but it dipped slightly to below parity at 18:00. Bloomberg attributes the change largely to the strength of the franc: “The franc has gained 1.6 percent against the dollar and 0.3 percent versus the euro in the past month as some investors bet that signs the economy is recovering may prompt the central bank to stop selling the currency.”
The US Federal Reserve Wednesday released minutes from its 4 November meeting, indicating that it was not overly concerned by the dollar’s fall.
Links to other sites: Bloomberg, FE.com, TheStreet.com, US Federal Reserve
Zurich, Switzerland (GenevaLunch) – The US dollar continued its slide in world currency markets, pushing the price of gold higher. It reached near parity with the Swiss franc, at 1.0048, in trading Monday 16 November, and was virtually at 1.50 euros: 1.4960. Gold rose to $1,132.95 although it later slipped slightly.
Links to other sites: Bloomberg, Financial Times
