Bloomberg News

Franc Gains on Bets SNB to Refrain From More Weakening Measures

December 15, 2011

Dec. 15 (Bloomberg) -- Switzerland’s franc strengthened against all of its 16 major counterparts as investors bet the central bank will refrain from introducing new measures to weaken the currency at a policy meeting today.

The currency rose the most against the South Korean won and Taiwan dollar as economists said Swiss National Bank policy makers, led by Philipp Hildebrand, will keep the franc’s ceiling at 1.20 per euro when they meet in Zurich today. The central bank will also maintain its benchmark interest rate at zero, when policy makers announce their decision at 8:30 a.m. London time, a separate survey showed.

“We agree that there is a very strong case for further loosening of monetary policy in Switzerland but that the extreme market uncertainty about the euro-area sovereign debt crisis means that the SNB will probably wait until the situation is somewhat calmer,” Barclays Capital including Paul Robinson wrote today in a note to clients.

The franc gained 0.5 percent to 94.93 centimes per dollar at 8:09 a.m. after dropping to 95.48 centimes, the weakest since Feb. 17. The currency rose 0.2 percent to 1.23345 per euro.

The Swiss currency has weakened 3.8 percent in the past three months, paring its gain for the year to 0.6 percent, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-nation currencies.

The SNB set the ceiling against the 17-nation euro on Sept. 6 as investors bought the currency as a haven amid the euro-area sovereign-debt crisis.

--Editors: Nicholas Reynolds, Mark McCord

To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net


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