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Wednesday, August 10, 2011

SNB Moves In, Franc Moves Back

The Swiss franc retreated today from the yesterday’s records against the dollar and the euro as the Swiss National Bank expanded measures aimed to tame the excessive appreciation of the currency.

The SNB repeated that a strong currency is a ”threat” to the nation’s economy. As a result, the bank decided to increase pressure on the franc:

In the light of these developments, the Swiss National Bank (SNB) is taking additional measures against the strength of the Swiss franc. It will again significantly increase the supply of liquidity to the Swiss franc money market.

To increase liquidity, the SNB “will additionally conduct foreign exchange swap transactions”.

USD/CHF climbed from 0.7205 to 0.7257 as of 10:11 GMT and reached the intraday high of 0.7331. EUR/CHF advanced from 1.0365 to 1.0426 after it dropped yesterday to the record low of 1.0089.

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