News Column

Franc's rise against euro could prompt central bank to step in

August 29, 2014


THE SWISS franc rose to its highest in nearly 21 months against the euro yesterday, triggering speculation that the Swiss National Bank may intervene to keep a lid on the currency and ward off the threat of deflation in Switzerland.

The franc has been rising steadily this month, partly due to safehaven flows given the conflict between Russia and Ukraine.

Momentum has picked up in recent days as more investors sold the single currency after European Central Bank president Mario Draghi said last week that the bank was prepared to respond with all its available tools should inflation drop further.

That has led markets to speculate that the ECB may resort to asset purchases, or quantitative easing, sooner rather than later, leading to a drop in Eurozone yields and diminishing the euro's allure.


For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: City A.M. (UK)

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters