Speculation of Swiss intervention
The Swiss franc fell drastically on Wednesday and this has led to speculation the Swiss National Bank intervened to weaken the currency by selling it. The analysts believe other central banks could potentially follow in the Swiss' footsteps in finding other ways to stimulate their economies. In the past couple of weeks there have been five or six central banks talking down their currencies. Like the Swiss, they are worried that currency appreciation could offset potential stimulus for the economy.
In addition to weakening a country's currency, the buying of government or corporate bonds can help support an economy when interest rates can not go any lower. The call to attention of potential Swiss meddling came yesterday when the franc fell 3% against the dollar and 1.8% against the euro.
The Swiss franc is currently exchanging at EUR1.5312 and USD1.0983.
The rates quoted above are interbank rates. Client rates may vary according to the volume and timing of the trade.