Swiss Franc Advances, Scotching Jordan’s Prediction of WeaknessLucy Meakin
The Swiss franc strengthened the most in more than a week versus the dollar, scotching central bank president Thomas Jordan’s prediction that the currency will continue to weaken.
The franc advanced against most of its 16 major peers tracked by Bloomberg after Jordan told reporters in Geneva the franc is “still at a high level even at the current price.” He also rejected the notion that central banks are engaging in a currency war. It climbed from the weakest in almost two weeks against the dollar even after Swiss consumer prices extended their longest slump in at least four decades in January.
“It’s really a counterintuitive move,” said Peter Rosenstreich, chief foreign-exchange strategist at Swissquote Bank SA in Geneva. “In general, we’re seeing a retracement of the selloff that we saw last week. I don’t think the comments that we heard today should be putting us in the direction of a stronger Swiss franc.”
The franc advanced 0.5 percent to 91.60 centimes per dollar at 4:19 p.m. London time after gaining 0.6 percent, the steepest appreciation since Feb. 1. It earlier fell to 92.15 centimes, the weakest since Jan. 30. The Swiss currency was little changed at 1.2332 per euro.
The Swiss National Bank imposed a ceiling of 1.20 francs to the euro in September 2011 to help exporters and fend off deflation after the franc almost reached parity with the 17-nation common currency. The franc has weakened 1.9 percent against the euro this year as the easing European sovereign-debt crisis sapped demand for haven assets.
Swiss consumer prices fell 0.3 percent from a year earlier after dropping 0.4 percent in December, the Federal Statistics Office in Neuchatel said in an e-mailed statement today. That’s the 16th consecutive month of annual declines, the longest stretch since at least 1971, according to data compiled by Bloomberg.