Swiss Franc Falls to Nine-Month Low as Haven Bid Boosts U.S. Dollar Demand
The franc was little changed against the euro before Swiss National Bank policy makers meet tomorrow to decide if they will further weaken the currency. The Stoxx Europe 600 Index of shares dropped 1.8 percent and the U.K.’s FTSE 100 index (UKX) slid 2 percent.
“Renewed uncertainty concerning the European debt crisis is triggering risk aversion in global markets resulting in a stronger dollar,” said Bernd Berg, a currency strategist at Credit Suisse Group AG in Zurich. “Movements in the franc, however, are minimal and the market is looking forward to the key SNB meeting tomorrow.”
The franc fell 0.7 percent to 95.26 centimes per dollar at 3:57 p.m. London time, after touching 95.29 centimes, the weakest level since Feb. 18. The currency traded little changed at 1.2338 per euro.
SNB policy makers, led by Philipp Hildebrand, will keep the franc’s minimum exchange rate at 1.20 per euro when they meet in Zurich tomorrow, according to nine of 13 economists surveyed by Bloomberg.
The Swiss currency has weakened 3.8 percent in the past three months, paring its gain for the year to 0.5 percent, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-nation currencies. The SNB set the ceiling against the 17-nation euro on Sept. 6 as investors bought the franc as a haven amid the euro-area sovereign debt crisis.
Swiss consumer prices fell 0.5 percent in November, the Federal Statistics Office in Neuchatel said Dec. 6, the biggest drop since October 2009. The country’s economy grew 0.2 percent in the third quarter, the slowest pace in more than two years, the State Secretariat for Economic Affairs said Dec. 1.
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