Swiss Franc Trades at Record as Budget-Tightening Concern Hurts the Euro
The Swiss franc climbed to the highest level against the euro since the European currency’s introduction in 1999 on concern fiscal tightening will limit growth in the euro region.
The Swiss franc reached 1.4005 per euro, beating the previous high of 1.4006, as of 5:14 p.m. in Zurich. The euro slid 0.3 percent to $1.2581, near the lowest level since March 2009.
Market intervention by the Swiss National Bank may have prevented further gains by the franc, said Roberto Mialich, a senior global-currency strategist UniCredit SpA in Milan.
“The euro is tumbling against the dollar and this has some spillover effect on the other crosses,” Mialich said today by phone. “We can presume the SNB is defending 1.4000, although we have no confirmation of that.”
A person who answered the phone at the SNB press office in Zurich said the bank was closed for a holiday today. It will reopen tomorrow at 8 a.m. Zurich time, he said.
The central bank started selling francs in March 2009 to ward off deflation and revive the economy. The franc jumped as much as 2.2 percent on May 6 after data showed Switzerland’s consumer prices increased 1.4 percent in April from a year earlier, matching the fastest pace since November 2008. The SNB’s chairman, Philipp Hildebrand, said two days ago the bank won’t accept an “excessive” appreciation of the currency.
“The Swiss economy is moderately improving,” Mialich said. “After the 1.40 barrier has been triggered there’s a risk the euro/Swiss rate may head for 1.38 unless the SNB steps in stronger.”