The safe haven Swiss Franc surged broadly during European trade and struck a 2-week peak versus the common currency Euro as investors’ fears grows. The situation in Greece continues to deteriorate and investors believe that the government is likely to default and thus be compelled to exit the Eurozone.
As reported at 8:50 am (BDT) in London, the CHF/EUR was trading at 1.0449 Swiss Francs, a loss of 0.36%; earlier, the pair has ranged between 1.0403 and 1.0486 Swiss Francs. The USD/CHF is also lower, trading at 0.9285 Swiss Francs, a decline of 0.41%; earlier, the pair had hit 0.9234, the lowest price of the month.
SNB Decision Looms
The Swiss Franc’s rise puts the Swiss National Bank in a difficult position as demand for the currency is not driven by economic factors that it could otherwise control. On Thursday, the Swiss National Bank will be making its monetary policy decision, and the consensus currently is that interest rates will remain at current levels. FX traders will scrutinize the policy announcement for any clues that the SNB is prepared for additional easing. However, given the situation in the Eurozone, some analysts don’t believe that a rate cut would diminish demand for the currency as investors safe haven of choice.