Swiss Franc Devaluation Attempt Backfires

August 18, 2011

Traders shrugged off new measures by the Swiss authorities to stem demand for their currency, sending the Swiss franc sharply higher on Wednesday.

The Swiss franc jumped 2 per cent against both the euro and the dollar in a matter of minutes, as traders ignored the Swiss National Bank’s decision to almost double the amount of liquidity available to the money market from SFr120bn ($152bn) to SFr200bn. The increase, which compares with “normal” liquidity levels of about SFr30bn, has lowered already rock-bottom interest rates and turned some short-term rates negative.

While the Swiss franc pared some of its gains later in the session, in late New York trading it was still up 0.8 per cent against the euro at SFr1.1391 and 1.1 per cent against the dollar at SFr0.7886.

“The measures taken thus far by the Swiss National Bank against the strength of the Swiss franc are having an impact. Nevertheless, the Swiss franc remains massively overvalued,” the SNB said.

The Swiss government also announced that it would allocate SFr2bn to help consumers, exporters and the tourism industry, which have all been hit by the currency’s rise. “Measures … are being examined and will be rapidly implemented,” the government said in a statement, but did not provide any details.

Read Full Article…

About Luis Miranda
The Real Agenda is an independent publication. It does not take money from Corporations, Foundations or Non-Governmental Organizations. It provides news reports in three languages: English, Spanish and Portuguese to reach a larger group of readers. Our news are not guided by any ideological, political or religious interest, which allows us to keep our integrity towards the readers.

Comments are closed.

%d bloggers like this: