By: Barbara Zigah
The U.S. Dollar slipped back from a 2-month high versus major currencies in the Asian session, following a rebound in higher yielding currencies which tracked gains in the equity markets. The Japanese Yen also rose following the central bank’s decision not to make any changes to its current loose monetary policy; most recently, the U.S. Dollar was trading 0.5% lower against the Yen, to 77.30 Japanese Yen.
The Swiss Franc, meanwhile, was hit with a strong sell-off following yesterday’s shocker by the Swiss National Bank, which pegged the strong currency to the Euro; in a statement, the SNB said that they would take utmost care to enforce the 1.20 peg between the two currencies. The Euro benefited almost 10% as a result of the SNB’s pegging, and continues to hover around $1.2045 Swiss Francs.
Immediately following the announcement, the U.S. Dollar had also surged higher against the Swiss Franc, gaining more than 8% at one point, however, the momentum has already waned; in today’s trading, as of 7:15 a.m. (GMT), the USD/CHF pair is already lower at 0.8573 Swiss Francs, which analysts point out underscores the difficulty that the Swiss National Bank is likely to continue to face.