Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Forex - USD/CHF jumps to 2-month high after SNB move

Published 09/06/2011, 05:57 AM
Updated 09/06/2011, 05:57 AM

Investing.com – The U.S. dollar jumped more than 7% against the Swiss franc on Tuesday, after Switzerland’s central bank intervened in currency markets to curb the strong franc, saying the strength of the currency posed a threat to the economy.

USD/CHF hit 0.8500 during European morning trade, the pair’s highest since July 7; the pair subsequently consolidated at 0.8486, leaping 7.81%.

The pair was likely to find support at 0.8281, the low of July 12 and short-term resistance at 0.8550, the high of June 15.

The Swiss National Bank announced that it had set a minimum exchange rate target of 1.20 per euro for the Swiss franc, saying the massive overvaluation of the currency posed an acute threat to the Swiss economy and carried a risk of deflation.

The central bank said it was prepared to enforce this minimum rate with the utmost determination by purchasing foreign currency in unlimited quantities.

The announcement came after official data showed that Swiss consumer price inflation fell 0.3% in August, after dropping by 0.8% the previous month, surpassing expectations for a 0.2% decline.

The Swissie was also sharply higher against the euro, with EUR/CHF jumping 8.37% to hit 1.2026.

The SNB intervention came after the Swiss government issued a statement late last week declaring that all federal parties stood behind the central bank’s actions and asserting that the central bank was solely responsible for currency policy.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.