FXstreet.com (Barcelona) - The Swiss franc hit a new record low against the euro today, after a Swiss Central Bank official alluded deflationary risks had by-and-large disappeared and intervention would be winding down. The EUR/CHF dove on the news, reaching 1.3411 or nearly 1% lower on the day where it trades currently. Against the US dollar, the news dropped the pair to its lowest level since early May as it trades at 1.0874 at time of writing after reaching a low of 1.0850 just prior.
Due to upbeat prospects for Switzerland’s economy including robust exports, the SNB has dropped its strong monetary policy which was used to bolster growth and fight deflationary pressure since March of 2009. While intervention is seemingly falling out of favor by the central bank, officials made clear it would remain focused on price stability should the sovereign debt crisis spreading through the euro zone lead to further deflationary pressures.
