The Swiss franc held near the lowest level in a week against the euro amid speculation policy makers will limit gains by the currency as they seek to fight deflation and spur economic growth. The franc weakened by the most in almost a month on May 15, a day after Swiss National Bank governing board member Thomas Jordan told the SF Info television channel the central bank will act “decisively” to curb any increase in its currency. SNB spokesman Werner Abegg declined to comment today on speculation the Bank for International Settlements sold the franc last week. “The SNB will act if we appreciate below 1.50” francs per euro, said Martin McMahon, a currency strategist in Zurich at Credit Suisse Group AG, Switzerland’s largest bank by market value. “Their comments show they mean business.” The franc fell as much as 0.1 percent to 1.5147 per euro, the lowest level since May 8, and was at 1.5120 by 4:48 p.m. in Zurich, from 1.5135 on May 15. It was little changed at 1.1206 versus the dollar. Switzerland’s currency lost about 2 percent against the euro since March 11, the day before the SNB announced it would act to prevent the franc’s appreciation. In the six months prior to that it advanced almost 8 percent versus its European counterpart. Gains in the franc make Swiss goods more expensive for consumers in the 16-nation economy, Switzerland’s main export market, in a year when the SNB expects the economy to shrink as much as 3 percent, the biggest contraction since 1975. Switzerland’s exports slipped in March for a second month, and a report May 6 from the KOF research institute showed capacity utilization among the nation’s manufacturers fell to the lowest level in three decades. The Zurich-based central bank cut its benchmark interest rate close to zero on March 12 and said it will purchase bonds to help stimulate borrowing and boost growth.

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