The Swiss franc strengthened through 1.20 per euro for the first time as investors sought the safest European assets amid mounting concern that European officials will fail to contain Greece’s debt crisis.
The franc extended its run as the best-performing of 16 major currencies tracked by Bloomberg for the year to date. The Swiss National Bank will keep its benchmark interest rate at 0.25 percent today, according to all 26 economists surveyed by Bloomberg News. Greek Prime Minister George Papandreou said yesterday he would call a vote of confidence in Parliament, while Moody’s Investors Service said it may downgrade French banks because of their investments in Greece.
“The political developments in Greece have triggered stress across financial markets,” said Ray Farris, chief strategist for Asia-Pacific fixed income and global head of foreign-exchange strategy at Credit Suisse Group AG in Singapore. “There’s also some use of the franc as a hedge on euro-area risk.”
The franc appreciated as much as 0.8 percent to 1.19956 against the euro, before trading 0.4 percent stronger at 1.20478 as of 7:13 a.m. in London. The currency was little changed against the dollar at 85.31 centimes.
“The SNB, given what’s happening with the currency, will probably go out of its way to be irrelevant,” Farris said. “They’ll want to give the market nothing to add to the currency’s strength.”
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