The Swiss franc rose to its highest in twenty months against the dollar after employment data in the U.S. missed economist estimates.
The franc, which investors tend to buy at times of heightened risk aversion, hit its strongest since Feb. 29, 2012, after the U.S. Labor Department said that U.S. payrolls climbed by 148,000 in September. That missed the 180,000 median forecast of 93 economists surveyed by Bloomberg and indicates that the world’s biggest economy had little momentum leading up to the shutdown of the federal government.
You-Na Park, foreign exchange analyst at Commerzbank AG in Frankfurt, said the big question for investors was when the U.S. Federal Reserve would begin to reduce its bond buys.
“The weak numbers today support the view that the U.S. central bank will push back the data when it begins the tapering,” she said by telephone. “We’re seeing the dollar dropping against most major currencies. It’s a risk off theme.”
The franc was up 0.3 percent against the greenback at 89.93 centimes at 3:08 p.m. in Zurich, having climbed as much 0.6 percent after the the data was published. Against the euro it stood at 1.2347.
To lessen the impact of haven inflows, the Swiss National Bank set a cap of 1.20 per euro on the franc in Sept. 2011. SNB President Thomas Jordan said on Oct. 14 the franc was still strong and that the currency ceiling remained essential to protect the economy.