FRS: Swiss franc climbs versus euro, approaching last week’s record
The Swiss franc rose against the euro, approaching a record, as stock-market declines in the U.S. boosted demand for the currency as a haven amid concern the global recovery is faltering.
The franc gained by the most in more than a week against the 16-nation euro. A report this week may show Swiss growth accelerated in the second quarter, according to a Bloomberg survey of economists. Swiss currency interventions to limit the franc’s gains were “of no use” as there was never a risk of deflation in Switzerland over the last two years, Sonntag newspaper reported yesterday, citing the central bank’s former chief economist, Ulrich Kohli.
“Risk aversion is putting upward pressure on the franc,” said Marcus Hettinger, a strategist at Credit Suisse Group AG in Zurich. “The growth data is likely to be good.”
The franc appreciated by as much as 1.1 percent, the most since Aug. 19, and was at 1.2997 as of 3:51 p.m. in London. It reached 1.2972 on Aug. 25, the strongest level since the single currency was introduced in 1999. The franc gained 0.4 percent to 1.0244 against the dollar.
The franc rose against 14 of its 16 most-actively traded peers today, rising the most versus the Mexican peso and Norwegian krone. It has advanced 4.9 percent this year, according to Bloomberg Correlation-Weighted Indexes.
Stock Reversal
The Standard & Poor’s 500 Index slipped 0.5 percent after a lower than-forecast growth in U.S. personal incomes added to concern the economic rebound is slowing.
The franc has advanced 1.3 percent against the euro since Aug. 21, when SNB President Philipp Hildebrand was quoted in Tages-Anzeiger as saying the central bank’s ability to counter currency gains was limited by its inflation mandate. The SNB is following the franc “very closely,” Vice Chairman Thomas Jordan told SonntagsZeitung newspaper in an interview published yesterday.
Swiss gross domestic product rose an annual 2.6 percent in the second quarter, up from a revised 2.3 percent in the previous three months, according to the median prediction of seven economists polled by Bloomberg. The State Secretariat for Economic Affairs is scheduled to release the data on Sept. 2.
