The Swiss franc slumped today after Federal Reserve Chairman Ben. S. Bernanke spoke today, improving sentiment on markets, while rumors abound that Switzerland’s policy makers are preparing another action to weaken the Swiss currency.
There are different opinions on what steps Switzerland is going to take in order to weaken its currency. Some analysts speculate that the Swiss National Bank is preparing another intervention. Some experts predict that local banks may impose charges for franc deposits. Whatever the truth is, the rumors undermine franc’s strength.
Optimism, caused by the speech of Chairman Bernanke, influenced the franc even more, perhaps. Jeremy Stretch, head of currency strategy at Canadian Imperial Bank of Commerce, thought:
What Bernanke said suggested was perhaps the world’s economic weakness is not so bad that it warrants another round of QE, and that helped to damp demand for the franc. There has also been speculation about the SNB’s possible further action on the franc, which makes the market cautious.
USD/CHF climbed from 0.7928 to 0.8060 as of 20:11 GMT today after touching the daily high of 0.8157, the highest level since July 22. EUR/CHF advanced from 1.1401 to 1.1684. CHF/JPY sank from 97.61 to 95.05, while earlier it reached the lowest price since June 20 — 94.44