Franc’s Rally Fails on Euro-Peg Speculation

The uncertain economic situation on market creates great demand for safer currencies. Governments, worried by resulting appreciation, attempt to intervene to rein excessive appreciation of such currencies. Today, the Swiss franc was one of the currencies that felt pressure.

The franc is still feeling support as the problems of economic across the world drive investors to safety of the Swissie. On the other hand, prospects of euro-peg make them reluctant to rely on the currency too much. As a result, the franc rallied today, but gave up its gains by the end of the trading session.

According to the unproved rumor, the Swiss National Bank is planning to set the exchange-target near 1.2 francs per euro. Currently, it’s not very important whether the SNB is really planning to link the franc to the euro or not (in the longer term it’s important, of course). Simple talks about such possibility are enough to drag the Swiss currency down.

USD/CHF traded near 0.7893 as of 23:50 GMT after falling from 0.7904 to 0.7838 earlier. EUR/CHF declined from 1.1369 to 1.1334, while the daily low was 1.1266. CHF/JPY rose from 97.02 to 97.35 and reached the high of 98.05 intraday.

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