2nd September 2011
The Swiss franc rose sharply against the euro and the dollar on Friday (September 2nd), with ongoing concerns about the eurozone's debt crisis prompting investors to seek safe havens once again.
Extending gains made earlier in the week, it has now risen by 5.2 per cent against the euro - the biggest weekly upward movement since the introduction of the single currency in 1999.
Pressure is mounting on the Swiss National Bank to curb the strength of the franc with a decisive measure, as the country's exporters are increasingly suffering from the soaring value of the currency in forex trading.
The Zurich-based central bank has so far resisted calls for direct intervention, but You-Na Park, a strategist at Commerzbank in Frankfurt, told Bloomberg it may soon have no alternative.
He said: "The SNB will fire its nuclear weapon and start interventions if the franc reaches parity. The current franc levels really hurt the economy."
Meanwhile, risk aversion in Europe is being fuelled by growing concerns over Greece meeting its deficit target and the European Central Bank policy meeting next week, when the institution's hitherto hawkish stance on inflation could be abandoned.
Posted by Andrew Henderson
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