Posted on 12/21/2009 11:02:00 AM PST by Cheap_Hessian
The Swiss franc pulled back from a nine-month high against the euro on Monday amid speculation that the Swiss National Bank had intervened to stem the currency’s rise.
The Swiss franc broke through SFr1.50 against the euro on Friday for the first time since March when the SNB announced that it was going to act to halt the strength of its currency as it fought against deflation.
The rise in the Swiss franc came amid increasing concerns over the health of the eurozone banking system, which sparked haven demand for the Swiss currency.
Many had expected the SNB – which is believed to have intervened at least three times since March to defend the SFr1.50 level – to intervene again.
However, when the central bank made no appearance, investors pushed the Swiss franc higher and tested the SNB’s tolerance of its currency’s strength.
Analysts said the lack of action from the SNB reflected the slight change it made to its statement following its policy meeting this month.
The central bank maintained that it would continue to act decisively to prevent any “excessive” appreciation of the Swiss franc.
(Excerpt) Read more at ft.com ...
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