Swiss Franc Retreats After Central Bank Statement

The Swiss currency had its previous week rally versus currencies like the pound and the euro halted today after the national central bank took a position against further advances of the franc, as the current appreciation was considered excessive by SNB officials.

After a rally that lasted during most of the past week trading session, the Swiss National Bank President Philipp Hildebrand stated today that the franc’s fluctuations will be monitored closely, also signaling that policy makers will attempt to prevent further gains for the its currency, as current levels, specially versus the euro, are considered too high. The Swiss franc also advanced considerably last week versus the greenback, as bets that interest rates will be raised in the U.S. declined after negative data was released.

Most of the franc’s advance during the past month were based on speculations that the SNB authorities would take a rather passive policy regarding the currency’s fluctuations, but after today’s affirmations, it’s likely that the Swiss currency will experience a considerable decline, or at least, a rather neutral trend as fears for interventions will certainly count on trader’s sentiment towards the Swiss franc.

EUR/CHF currently trades at 1.4752, 15:52 GMT, from as 1.4722 when markets opened yesterday. GBP/CHF also climbed to 1.6391 from 1.6310.

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