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August 17, 2011 at 06:50 AM
The Swiss franc continued its rise into the stratosphere on Wednesday, spurred on by a failure by the Swiss National Bank (SNB) to directly intervene in the currency’s valuation. Instead SNB boosted liquidity and said it would take additional steps.
Markets, however, according to a Bloomberg report, were expecting much more decisive action, and the franc added as much as an additional 2.1% in morning trading. As reported Tuesday by AdvisorOne, SNB had broached the possibility of pegging the currency to the euro as a means of stopping its dangerous escalation in value.
Steven Saywell, head of foreign exchange strategy for Europe at BNP Paribas SA in London, was quoted saying, “There were strong expectations, maybe too much, in terms of interventions or a peg. What we’re seeing here is disappointment … it’s going to be very difficult for the SNB to stand in the way of the foreign exchange markets, which will want to push the franc higher.”
