Feb. 2 (Bloomberg) -- The Swiss franc slipped from yesterday’s four-month high against the euro amid speculation the nation’s central bank may sell the currency to protect its exchange-rate ceiling.
The franc fell for the third time in four days against the dollar even as data showed exports rebounded in December. SNB Governing Board member Jean-Pierre Danthine said last week that policy makers are ready to defend the limit of 1.20 per euro they imposed in September, and Economy Minister Johann Schneider-Ammann said the “export industry is damped by the exchange rate.”
“There’s still a lot of discussion about how the SNB defends the exchange-rate floor,” said Elizabeth Gregory, a market strategist at Swissquote Bank SA in Geneva. “The chatter is increasing whether the Swiss National Bank will intervene before 1.20.”
The franc weakened 0.5 percent to 91.95 centimes per dollar at 12:30 p.m. London time. The Swiss currency traded at 1.20457 per euro after reaching 1.20319 yesterday, the strongest level since Sept. 19.
Foreign sales, adjusted for inflation and seasonal swings, advanced 6.1 percent from November, when they declined a revised 4.8 percent, the Federal Customs Office in Bern said in a statement today.
The franc has lost 14 percent against a basket of nine developed-market peers in the last six months as the SNB imposed its ceiling, according to Bloomberg Correlation-Weighted Currency Indexes. That’s the worst performance among the 10 currencies tracked by the measure.
The SNB will “continue to enforce the minimum rate with the utmost determination and remains prepared to buy foreign currency in unlimited quantities,” Danthine said on Jan. 24. “The franc is still highly valued, but it should depreciate further in the future.”
--With assistance from Klaus Wille in Zurich. Editors: Paul Dobson, Nicholas Reynolds
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