Switzerland’s franc jumped to a record against the euro for the fifth straight day after Moody’s Investors Service said it may downgrade Portugal’s credit rating, boosting demand for the Swiss currency as a haven.
The franc was near a six-week high against the dollar. Moody’s may cut its rating on Portuguese debt “by a notch or two” because of uncertainty about economic growth prospects, the agency said today. Switzerland’s currency has surged 17 percent against the single currency this year as Europe’s sovereign-debt crisis worsened.
“At the moment it is still probably risk aversion” driving the franc’s strength, said Marcus Hettinger, a foreign-exchange strategist at Credit Suisse AG in Zurich. “We had the downgrade warning on Portugal, which is probably weighing on the euro.”
The Swiss franc strengthened 0.3 percent to 1.2628 per euro as of 12.07 a.m. in London. It earlier reached 1.2616, breaching yesterday’s record of 1.2636. The Swiss currency has extended its record against the euro each day since Dec. 15, when it breached a 1.2766 high set on Sept. 8. The franc strengthened 0.5 percent to 95.97 centimes per dollar. It reached 95.59 on Dec. 17, the highest since Nov. 5.
Hettinger expects the franc to “recover back” to 1.30 per euro within the next six months and 1.35 per euro within a year.
Emma Charlton in London at +44-20-7392-0427 or firstname.lastname@example.org