Swiss franc down against euro after SNB commits to cap

ZURICH: The Swiss franc slipped against the euro on Thursday after the Swiss National Bank's vice chairman said it will defend the limit of 1.20 francs per euro with all necessary means.

"Our policy is crystal clear. We have introduced a cap against the euro and we will defend this with all means," Thomas Jordan said late on Thursday in Basel.

"It's the case that this limit is very, very credible," he said. "And we also expect to be able to maintain this level."

The SNB said on Sept. 6 that it would not allow the franc to appreciate past 1.20 per euro and would use unlimited currency interventions if necessary.

The franc fell 0.2 percent against the euro to trade at 1.2207 by 0638 GMT compared to the New York close.

Credit Suisse analyst Koon How Heng said the franc was staying glued around 1.22 per euro.

"Jordan even went further to highlight that the SNB can continue its current action even if it falls into a negative equity position for a short period of time," he noted.

The franc rose 0.5 percent against the dollar to 0.8963, tracking the euro higher against the greenback ahead of a vote in Germany's parliament that is expected to approve new powers for the euro zone's bailout fund.

"It is downside corrective near term and has already eased back towards initial support at 0.8927 (Sept. 12 high), this is holding so far," said Commerzbank technical analyst Karen Jones.