Swiss Franc Gains Versus Euro as Equity Markets DeclineCatherine Bosley and Emma Charlton
The Swiss franc rose against the euro, reversing yesterday’s fall, with stock markets in Europe and the U.S. declining on concerns the U.S. Federal Reserve will pare debt purchases as the economy recovers.
“There’s a lot of volatility in equity markets and fixed income markets and the Swiss franc is moving as part of that,” said Paul Robson, senior currency strategist at Royal Bank of Scotland Plc. “The focus is on capital outflow as people get to grips with what higher U.S. yields mean.”
Stocks fell, trimming a 12th consecutive monthly advance in Europe. U.S. Fed Chairman Ben S. Bernanke said last week the central bank could reduce the pace of its purchases if officials see signs of sustained improvement in growth.
The franc traded up 0.8 percent against the euro at 1.24587 at 5:20 p.m. in Zurich. Against the dollar, the franc climbed 1.6 percent to 96.18 centimes.
The Swiss National Bank has a cap of 1.20 per euro on the franc. Last week, comments by SNB President Thomas Jordan, who said a shift of the cap on the franc and negative interest rates were among possible steps the SNB could take, prompted the franc to weaken past the 1.26 mark for the first time in two years.