The Swiss National Bank intervened in foreign exchange markets Thursday to prevent the Swiss franc from rising further, selling the Swiss currency against both the dollar and the euro, market-watchers said.
Market watchers said the intervention marks the first time the SNB has been primarily active in the Swiss franc-dollar pair, after three interventions earlier this year focusing on the Swiss franc-euro cross.
“There’s market talk about an SNB intervention to keep the franc from rising at a fast pace, selling Swiss francs against the dollar this time,” said Kasper Kirkegaard, currency strategist at Danske Bank. The SNB declined to comment.
The intervention, which appears to have taken place at a level of CHF0.9950 against the dollar, was then probably followed by a similar move in the Swiss franc-euro cross at levels around CHF1.50 to the euro, Kirkegaard added.
The move shoved the dollar up to the day’s high of 1.0044 Swiss francs, while the euro moved up to 1.5135 Swiss francs. But the euro then sunk back to the 1.5085 area, while the dollar has settled back at parity. At 1149 GMT, the dollar traded at 1.003 Swiss france and the euro at 1.5085 Swiss francs.
Analysts at UBS AG said this marks the fourth time the SNB has intervened in currency markets this year, and added that the focus on the Swiss franc-dollar rate came as a surprise.
However, the message in the SNB’s apparent actions is significant.
“If they had not intervened, then the euro could now be at about CHF1.40 and the dollar would be at about CHF0.90,” said Thanos Papasavvas, a currencies investor at asset management firm Investec in London. “They have been successful in decelerating the rate of the franc’s appreciation,” he added. – Martin Gelnar and Katie Martin
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