Franc Reaches Records Versus Euro, Dollar; U.S. GDP Disappoints

The Swiss franc surged to records against the euro and dollar after U.S. data showed the world’s biggest economy grew less than forecast in the second quarter.

The franc appreciated versus all of its 16 major peers tracked by Bloomberg. It climbed earlier as Moody’s Investors Service said it may downgrade Spain, spurring demand for the safest assets. U.S. gross domestic product rose at a 1.3 percent annual rate following a 0.4 percent gain in the prior quarter, less than previously estimated, Commerce Department figures showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for a 1.8 percent increase.

“The data from the U.S. is a reminder that the outlook for global growth is actually weak,” said Derek Halpenny, European head of currency research at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “The Swiss franc continues to be a favorite against other currencies, with strong liquidity and low government debt.”

The Swiss currency advanced 1.3 percent to 1.13394 per euro as of 5 p.m. in London, surpassing the 1.13737 record set on July 18. It reached a record 1.12982 earlier in the day. The franc strengthened 1.6 percent against the dollar to 78.74 centimes after appreciating to 78.54.

Switzerland’s currency has surged 3.6 percent against the euro this week as economic indicators in Europe’s most indebted nations worsened and optimism faded that last week’s European rescue package would stem the sovereign-debt crisis.

The Swiss central bank said today that it posted a first-half loss of 10.8 billion Swiss francs ($13.5 billion) as the decline of the euro eroded the value of the bank’s reserves.

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