BLBG:Franc Rises to Six-Week High Versus Euro on Italy Vote
The Swiss franc rose to a six-week high against the euro as speculation Italy will require a second vote after inconclusive elections boosted demand for the relative safety of Switzerland’s currency.
The franc advanced for a fifth day versus the euro as Italy’s pre-election favorite Pier Luigi Bersani won the lower house by less than a half a percentage point while Silvio Berlusconi, the former premier fighting a tax-fraud conviction, won a blocking minority in the Senate.
“The Swiss franc is the obvious ‘victim’ to the risk- aversion trade,” said Peter Rosenstreich, chief foreign- exchange strategist at Swissquote Bank SA in Geneva. “The Italian story is the only story that is driving markets right now. The franc is the risk-off trade.”
The Swiss currency appreciated 0.1 percent to 1.2169 per euro at 9:08 a.m. Zurich time after climbing to 1.2120, the strongest level since Jan. 10. The franc gained 0.1 percent to 93.08 centimes per dollar.
The Swiss National Bank imposed a ceiling on the franc of 1.20 per euro in September 2011 to help exporters and fend off deflation after it surged toward parity with the common currency.
“As long as the fiscal and structural problems of the euro region are unresolved, the threat of sudden, returning upward pressure on the franc isn’t over,” central bank President Thomas Jordan said last week.
The euro weakened against all except two of its 16 major counterparts on speculation political turmoil in Europe will prompt investors to sell the bonds of the region’s most-indebted nations.
To contact the reporter on this story: Zoe Schneeweiss in Zurich at zschneeweiss@bloomberg.net
To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net
