After touching parity and gaining further versus the U.S. dollar, the Swiss franc declined today versus virtually all 16 main traded currencies, as speculations indicate that the national central bank sold the currency to halt its rally.
The Swiss franc strength had already been focused by the Swiss National Bank during the past weeks since a strong currency could hurt exports performance, and yesterday, after the national currency reached parity versus the greenback, the highest rate since April 2008, the currency fell as speculations suggest that the nation’s central bank would have intervened selling francs and buying the greenback, an attempt to stop the bullish patterns for the Swiss currency, which has been gaining as a side effect of a U.S. dollar decline, and as the Eurozone, the main trading partner of Switzerland is recovering steadily from the biggest recession since the Second World War.
Even if the Swiss National Bank refused to comment about an eventual intervention “under the table”, talks in Switzerland are that the SNB is concerned about the franc’s level, interfering in open markets causing a sell movement of the national currency, which could be easily understood as it touched parity with the greenback yesterday. It is hard to determine the future rates for the franc as the SNB did not take an official position regarding the events.
CHF/JPY traded at 85.99 as of 16:19 GMT from 87.72 in the intraday. USD/CHF rose to 1.0057 after bottoming at 0.9931.
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