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Franc Continues Run Down on Prospect of Euro-Peg

August 12, 2011 at 23:33 by Vladimir Vyun

Swiss francThe Swiss franc extended its losses as traders are worried that the Swiss government is ready to go for extreme measures to tame the excessive appreciation of the currency.

Swiss National Bank Vice President Thomas Jordan signaled that peg of the Swiss currency to the euro isn’t impossible. The franc fell heavily after the news, posting the biggest decline against the euro since the introduction of the shared European currency. Perhaps Switzerland’s central bank has found a way to keep the nation’s currency from hurting the economic growth?

Whatever the truth is, traders currently flock to short positions on the franc. Despite the recent heavy losses, the currency is still up 5.9 percent against nine other currencies of the developed nations over the month, according to the Bloomberg Correlation-Weighted Currency Indexes.

USD/CHF closed at 0.7779 after opening at 0.7619 and falling to 0.7547. EUR/CHF rallied from 1.0844 to close at 1.078, while during the day it reached the low of 1.0685. CHF/JPY slid from 100.81 to 98.51.

If you have any questions, comments, or opinions regarding the Swiss Franc, feel free to post them using the commentary form below.

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