-Smaller than expected government economic support package boosts franc -SNB seen running out of options By Javier E. David Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- The Swiss franc surged by more than 2% against the dollar and euro Wednesday, as disappointment over a government economic package converged with growing frustration with the Swiss National Bank's lack of concrete measures to weaken the currency. Global turmoil has sent investors flocking to the franc as a shelter from the various storms buffeting financial markets. On Aug. 9, the Swiss currency soared to records against the greenback and Europe's single currency, sending Swiss officials to a frenzied search for new policies to keep the franc from undermining the country's exports. Switzerland initially advanced the idea supporting the country's economy with a round of aid worth CHF2 billion ($2.5 billion). But on Wednesday, the government announced a package that, at CHF870 million, was less than half of the original price tag. With traders already raising questions about the SNB's resolve to suppress the franc's rampant strength, disappointment with the size of the aid package--which in theory would have weakened the franc--sent the franc surging across the board. "There's disappointment that the SNB doesn't have further magic tricks up their sleeve, or at least none they are going to trot out at this time," said Greg Anderson, senior FX strategist at Citigroup. Since hitting its record highs in August, the franc had fallen by more than 10% against the dollar and euro as traders anticipated a new round of measures to cheapen the Swiss currency. But the smaller aid package and inaction by the SNB has "got the franc back in appreciation mode," Anderson added. The dollar plunged as low as CHF0.7993 before recovering modestly in early U.S. trading, while the euro fell to CHF1.1545. Even before the government slashed its aid package, the franc was already marching higher, spurred by nervous investors fleeing the fallout of Europe's debt crisis. In a note to clients Wednesday, Deutsche Bank--the world's largest currency dealing bank--said that the SNB's liquidity-boosting measures were reaching a limit. "We would view large-scale, unsterilized SNB intervention as the most natural next step," warned George Saravelos, a currencies strategist at the bank. The SNB has almost reached its overnight balances target, Saravelos said. "With liquidity conditions stabilizing, we believe the more likely outcome is that the normal macro drivers of the currency will return in coming weeks: the natural current account recycling flows as well as the flight from European peripheral woes," he added. Higher-yielding assets were spurred higher by a combination of U.S. manufacturing and jobs data that gave investors reasons to believe the economy was not as bad as expected. That supported the dollar, even as it fed risk-appetite that normally sees flows into currencies that offer higher returns than the low-yielding greenback. -By Javier E. David, Dow Jones Newswires; 212-416-4564; javier.david@dowjones.com -Andrew J. Johnson contributed to this article. -Jessica Mead in London contributed to this article.

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