The major currency of Switzerland, Swiss Franc increased the most against Euro since the day before the Swiss Central Bank imposed a cap on the major currency in 2011. Currently, there are high chances of a reduction in the monetary stimulus of US and hence, the demand for the haven assets received a big boost.
Swiss Franc went ahead not only against Euro, but most of its major counterparts too. On the other hand, as the Chinese manufacturing report showed that the industry unexpectedly experienced a decline; stocks all over the world went down. On yesterday, Swiss Franc weakened through 1.26 per Euro for the first time in last 2 years. Swiss Franc is often regarded as a haven, especially at the times of heightened global stress, as a study published by the Swiss National Bank on last month. Incidentally, on yesterday, the Chairman of the Federal Reserve, Ben S. Bernanke stated that the Federal Reserve may go for slowing down the monthly bond purchases in future.
AS far as the Chief Foreign Exchange Analyst of Swissquote Bank SA, Peter Rosenstreich is concerned, markets turned to a risk off mode with help of the comments made by Bernanke. Apart from that, it will now be pushing the investors towards haven currencies again.
On today, Swiss Franc went ahead by 1.3% against Euro and the same is currently priced at 1.2420 per Euro. Today’s gain marks the biggest of the currency since 5th September, 2011, a day before the Swiss National Bank set a cap of 1.20 Francs per Euro in an attempt to ward off deflation and a recession. On the other hand, against USD, Swiss Franc jumped up by 1.1% and it is currently at 96.75 Centimes per USD.
Incidentally, on yesterday, the Swiss Franc experienced a slump after the President of the Swiss National Bank; Thomas Jordon stated that a shift on the possible limit on the Euro exchange rate was in the toolkit of the Swiss National Bank.
Rosenstreich acknowledged that the comments made by Thomas Jordon increased the level of uncertainty when it comes to the next possible movement to be undertaken by the Swiss National Bank. However, as the market is currently expecting a possible movement from the Central Bank, it kind of got ahead of itself, as mentioned by Jordon.