THE GUARDIAN: Move – which effectively devalues the Swiss franc in an attempt to protect the economy – sparks fears of new currency war
Switzerland sparked fears of a new currency war on Tuesday after it pegged the Swiss franc against the euro in an attempt to protect its economy from the European debt crisis.
The Swiss National Bank in effect devalued the franc, pledging to buy "unlimited quantities" of foreign currencies to force down its value. The SNB warned that it would no longer allow one Swiss franc to be worth more than €0.83 – equivalent to SFr1.20 to the euro – having watched the two currencies move closer to parity as Switzerland became a "safe haven" from the ravages of the eurozone crisis.
The move stunned currency traders, and sent the Swiss franc tumbling against other currencies. Jeremy Cook, chief economist at currency brokers World First, said it was "intervention on a grand scale", and the start of a "new battle in the currency wars".
"That was the single largest foreign exchange move I have ever seen … The Swiss franc has lost close on 9% in the past 15 minutes. This dwarfs moves seen post Lehman brothers, 7/7, and other major geo-political events in the past decade," Cook said.
The SNB pledged to enforce a "substantial and sustained weakening of the Swiss franc", adding that it might move to an even lower exchange rate against the euro if needed. » | Graeme Wearden | Tuesday, September 06, 2011
NZZ ONLINE: Nationalbank legt Euro-Mindestkurs fest: Wert von weniger als 1.20 Franken soll nicht mehr hingenommen warden » | Dienstag 06. September 2011
FRANKFURTER ALLGEMEINE ZEITUNG: Schweiz koppelt Franken an den Euro: Die Schweiz legt einen Mindest-Wechselkurs des Franken zum Euro fest. Der gegenwärtige Kurs sei eine Gefahr für die Wirtschaft des Landes, teilt die Zentralbank des Landes mit. » | FAZ.NET / AFP, dapd | Dienstag 06 September 2011
TRIBUNE DE GENÈVE: La BNS décide que l'euro plafonnera désormais à 1, 20 franc : La Banque nationale suisse annonce fixer un cours plancher de 1,20 franc suisse pour un euro, afin d’enrayer le renchérissement continu de sa monnaie, faisant immédiatement relâcher la pression sur sa monnaie et s’envoler la Bourse. » | AFP | Mardi 06 Septembre 2011
