Switzerland’s franc appreciated against the dollar, euro and yen as investors sought a refuge as stock markets extended yesterday’s losses and mounting concern that the global economy is slowing. The franc rose against all 16 major counterparts tracked by Bloomberg, reversing an earlier decline against the dollar. The Swiss currency has risen for three days against the euro, even amid speculation the Swiss National Bank may take further steps to curb the currency’s strength. Two-year Swiss bond yields stayed negative for a third day, showing investors are sacrificing capital for the currency’s perceived safety. “The nervousness did not change the fact that the franc remains in demand as a safe haven,” wrote Commerzbank AG currency analysts including Antje Praefcke in Frankfurt. “There is no end in sight to the depressed mood on the markets. The franc is likely to remain under appreciation pressure.” Switzerland’s currency rose 0.6 percent to 78.91 centimes per dollar at 11:46 a.m. in London and strengthened 0.8 percent to 1.1286 per euro. Against the yen, it rose 0.5 percent to 96.89 yen. The franc has risen about 14 percent this year, making it the best performer among a basket of 10 developed-market currencies, according to Bloomberg Correlation-Weighted Currency Indexes. Risk Aversion Europe’s Stoxx 600 Index declined 2.9 percent, dragging the equity measure to its biggest two-day drop since November 2008. More than $6 trillion has been erased from the value of global equities this month on signs the U.S. recovery is stumbling, while the cost of insuring European sovereign debt is back to levels that triggered the region’s central bank to buy Italian and Spanish bonds on Aug. 8. The franc’s gain in the past three days failed to erase its weekly decline against the euro as investors were mindful that the SNB may introduce new measures to damp demand for the franc, whose 9.8 percent appreciation against the euro and 16 percent gain versus the dollar this year are making Swiss goods expensive abroad. SNB Vice President Thomas Jordan has said the central bank is assessing “a whole range of options” to prevent the franc from rising excessively. The currency has declined 1.9 percent against the euro this week, and weakened 1.5 percent against the dollar. The yield on 10-year Swiss bonds rose 10 basis points today to 0.96 percent after the rally yesterday pushed yields down to a record low of 0.85 percent. To contact the reporter on this story: Anchalee Worrachate in London at aworrachate@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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