SNB action fails to stem Swiss franc’s rise

Traders shrugged off new measures by the Swiss authorities on the 17 August 2011 to stem demand for their currency, sending the Swiss franc sharply higher.

The Swiss franc jumped 2% against both the euro and the dollar in a matter of minutes, as traders ignored the Swiss National Bank’s decision to almost almost double the amount of liquidity available to the money market from SFr120bn to SFr200bn.

The Swiss government also announced that it would allocate SFr2bn to help consumers, exporters and the tourism industry, which have all been hit by the currency’s rise. 'Measures ... are being examined and will be rapidly implemented'.

ECB: Press Release, 6.9.11: Statement of the Governing Council of the ECB on the decision of the Swiss National Bank http://www.ecb.int/press/pr/date/2011/html/pr110906.en.html

SNB: Press Release, 6.9.11: Swiss National Bank sets minimum exchange rate at CHF 1.20 per euro http://www.snb.ch/en/mmr/reference/pre_20110906/source/pre_20110906.en.pdf

ESO: Background information: Swiss central bank considers euro peg http://www.europeansources.info/record/swiss-central-bank-considers-euro-peg/

Swissinfo.ch, 17.8.11: Economy gets two billion franc support http://www.swissinfo.ch/eng/specials/swiss_franc/Economy_gets_two_billion_franc_support.html?cid=30928162

Swissinfo.ch, 17.8.11: Central bank moves again to dampen franc http://www.swissinfo.ch/eng/business/Central_bank_moves_again_to_dampen_franc.html?cid=30922628

Swissinfo.ch: Strong Franc - Cause and effects http://www.swissinfo.ch/eng/specials/swiss_franc/index.html?cid=28856262

SNB: Press Release, 17.8.11: Swiss National Bank intensifies measures against strong Swiss franc http://www.snb.ch/en/mmr/reference/pre_20110817/source/pre_20110817.en.pdf

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