RTTN:Swiss Franc Mixed After SNB Retains Rate, Currency Cap
The Swiss franc showed mixed trading against other major currencies on Thursday, after the Swiss National Bank retained the currency ceiling at CHF 1.2 per euro as an appreciation of the Swiss currency would affect price stability.
The minimum exchange rate is an important instrument in avoiding an undesirable tightening of monetary conditions, the central bank said.
The bank also maintained its key three-month Libor unchanged at 0.0-0.25 percent.
The central bank reiterated that it stands ready to take further measures at any time and is prepared to buy foreign currency in unlimited quantities if needed.
Erasing its immediate post-SNB gains, the franc depreciated 0.21 percent to a 3-day low of 1.2372 against the euro from Wednesday's close of 1.2346. If the franc slides further, it may break the key 1.24 level.
The franc also weakened against the dollar, falling to a medium-term support of 0.9555. The fall marks a 6-day low for the franc and a further downtrend from this point could help it to set a fresh 6-month low. The next likely support level for the franc is seen around 0.965 level.
The Swiss currency climbed to 101.40 against the against the yen from an Asian session's 6-day low of 100.55. On the upside, 102.00 is seen as the next likely target level for the Swiss unit.
Japan's industrial production grew only 0.3 percent in January from the previous month, final data published by the Ministry of Economy, Trade and Industry showed today. The rate of growth was trimmed from the prior estimate of 1 percent.
Against the pound, the franc recovered from its early 1-week low of 1.4273 and held steady around the 1.4260/65 area. The pair closed yesterday's deals at 1.4217.
A high level of leverage at private equity-owned companies pose key risks to financial stability, the Bank of England said in its Quarterly Bulletin on Wednesday.
The acquisitions of UK companies by private equity funds, using high leverage make those companies more susceptible to default. Moreover, a cluster of buyout debt mature over the next few years in the face of tight credit conditions.
Looking ahead, the Eurozone employment data for the fourth quarter is due shortly.
The U.S. PPI for February, weekly jobless claims for the week ended March 10 and current account data for the fourth quarter are likely to influence trading in the New York session.
