The Swiss National Bank (SNB) has intervened in the market this morning announcing that they will set a floor to the value of the Swiss Franc (CHF) against the Euro at EURCHF 1.20.
‘The current massive overvaluation of the Swiss franc poses an acute threat to the Swiss economy and carries the risk of a deflationary development. The Swiss National Bank (SNB) is therefore aiming for a substantial and sustained weakening of the Swiss franc. With immediate effect, it will no longer tolerate a EUR/CHF exchange rate below the minimum rate of CHF 1.20. The SNB will enforce this minimum rate with the utmost determination and is prepared to buy foreign currency in unlimited quantities. Even at a rate of CHF 1.20 per euro, the Swiss franc is still high and should continue to weaken over time. If the economic outlook and deflationary risks so require, the SNB will take further measures.’
On the interbank market EURCHF has appreciated from 1.10 to above 1.20. GBPCHF has appreciated past 1.36, whilst USDCHF trades above 0.84.
Elsewhere, EURUSD trades between 1.41-1.42, EURGBP trades at 0.88 (GBPEUR 1.1364) and GBPUSD trades at 1.61.