Switzerland's central bank announced further measures to weaken the franc, but failed to take the anticipated step of pegging the franc to the euro to discourage safe-haven investors. The Swiss National Bank (SNB) said it would further boost liquidity by expanding "sight deposits" – overnight deposits by banks to help liquidity – to Sfr 200 bn (£152bn) from Sfr 120 bn and was prepared to take more action if necessary. The measures saw the euro strengthen initially, past Sfr1.15 for the first time this month. But once it became clear that the bank had stopped short of radical action, heavy buying of the franc resumed. Over the past 18 months the franc has risen 25pc against the euro, squeezing Switzerland's vital export market. Almost 50pc of Swiss products, from cheese to pharmaceuticals, are exported. Tourism has also been hit by the currency swing as the price of goods has soared. Clive Lennox, head of foreign exchange trading at Clear Currency, said: "The supposedly neutral Swiss are causing some amount of trouble. The SNB shied away from its threat to peg the Swiss franc to the euro, boosting the safe-haven currency. Investors initially wound down their speculative short franc positions as protection against eurozone sovereign debt and global growth concerns." 
Access Investments-Building Awareness - European Union-ROMANIA
Thursday, August 18, 2011
Switzerland's central bank announced further measures to weaken the franc, but failed to take the anticipated step of pegging the franc to the euro to discourage safe-haven investors. The Swiss National Bank (SNB) said it would further boost liquidity by expanding "sight deposits" – overnight deposits by banks to help liquidity – to Sfr 200 bn (£152bn) from Sfr 120 bn and was prepared to take more action if necessary. The measures saw the euro strengthen initially, past Sfr1.15 for the first time this month. But once it became clear that the bank had stopped short of radical action, heavy buying of the franc resumed. Over the past 18 months the franc has risen 25pc against the euro, squeezing Switzerland's vital export market. Almost 50pc of Swiss products, from cheese to pharmaceuticals, are exported. Tourism has also been hit by the currency swing as the price of goods has soared. Clive Lennox, head of foreign exchange trading at Clear Currency, said: "The supposedly neutral Swiss are causing some amount of trouble. The SNB shied away from its threat to peg the Swiss franc to the euro, boosting the safe-haven currency. Investors initially wound down their speculative short franc positions as protection against eurozone sovereign debt and global growth concerns." 
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment