Swiss Franc Rises Against Major Currencies on Fed
The Swiss franc climbed against all of its 16 major peers as concern that the U.S. Federal Reserve will start reducing bond purchases next month boosted demand for Switzerland’s currency as a haven.
“The fear of an end of the ultra-easy money from the Fed scared away investors,” Marco Birrfelder, an interest-rate trader at Luzerner Kantonalbank AG (LUKN) in Lucerne, Switzerland, wrote in a note to clients, commenting on the franc. “We can probably expect new impetus only on Wednesday, when the minutes of the U.S. central bank’s July meeting are published.”
The franc advanced 0.5 percent to 91.98 centimes against the dollar at 11:46 a.m. in Zurich, after climbing as much as 0.7 percent, the biggest intraday move since Aug. 8. Against the euro it traded at 1.2321.
Investors tend to buy the franc at times of heightened anxiety. The Swiss National Bank (SNBN) set a cap of 1.20 per euro on the franc in September 2011, after it nearly touched parity with the euro amid the 17-member bloc’s debt crisis. The Zurich-based central bank cited the risk of deflation and a recession as its justification for the step.
Concern on the Fed’s next move also prompted a fall in stocks to a six-week low, while oil led declines in commodities.
To contact the reporter on this story: Catherine Bosley in Zurich at email@example.com
To contact the editor responsible for this story: Fergal O’Brien at firstname.lastname@example.org