Sept. 6 (Bloomberg) -- The Swiss franc weakened against the dollar and euro, amid speculation the nation’s central bank will take measures to curb the currency’s strength after consumer prices rose at the slowest pace in almost a year.
Switzerland’s currency snapped four days of gains after the Swiss National Bank today announced it had foreign-currency holdings of 253.35 billion francs ($319.7 billion) at the end of August, up from 182.1 billion francs in the previous month, a result of measures to weaken the franc. Policy makers have devalued the franc by as much as 16 percent against the euro from its Aug. 9 record high by cutting borrowing costs to near zero and boosting supply in money markets six-fold.
“In terms of permanent firepower the SNB is kind of stuck unless they launch something new, such as a foreign exchange floor or a target peg,” said Geoffrey Yu, a foreign-exchange strategist at UBS AG in London. “If euro-zone conditions continue to deteriorate, and we do think they will continue to deteriorate, that could prompt some more aggressive action.”
The franc weakened 0.7 percent to 79.28 centimes per dollar as of 8:41 a.m. in London. It also slid 0.7 percent against the euro, to 1.1169.
--Editors: Matthew Brown, Nicholas Reynolds
--Editor: Matthew Brown
To contact the reporter on this story: Lucy Meakin in London at email@example.com
To contact the editor responsible for this story: Daniel Tilles at firstname.lastname@example.org