The Swiss franc was down for the second week as prospects of peg of the currency to the euro significantly reduced appeal of the franc a safe asset.
At the beginning of the week the franc continued its run to the downside that it has started in the previous week. For some time it looked like we would see another week of significant losses of the Swiss currency. The Swissie reversed its trend after the Swiss National Bank announced on August 17 yet another intervention, but hasn’t mention anything about linking the franc to the euro. The franc fell against some currencies on the next day against some currencies, yet on Friday it rose again, reducing weekly losses by a great degree.
The future of the Swiss currency depends on how much faith Forex traders put in talks about euro-peg. Prospect of continual pressure on the franc would likely reduce attractiveness of the currency. Without such pressure the Swissie will continue its appreciation as the current situation in the world creates great demand for safer assets.
USD/CHF closed almost unchanged at 0.7848 from the opening level of 0.7829 after jumping as high as 0.8016. EUR/CHF jumped from 1.1172 to 1.1555, but erased most of its gains and closed at 1.1299. CHF/JPY fell from 98.03 to the weekly low of 95.62 before rebounding to close at 97.43.