ZURICH: The Swiss franc held recent gains against the dollar and trod water against the euro on Monday after Greece and its private creditors struggled to agree on a crucial debt swap deal to avoid a default, prompting safe-haven buying.
This places the focus on a meeting of euro zone finance ministers starting Monday who will decide what terms of a Greek restructuring they are prepared to accept in order to pave the way for a second bailout package for Athens.
"The Greek government wanted to present a solution on Monday morning, which hasn't happened, and that's certainly spurring safe-haven demand and keeping a lid on the franc at 1.21," said Sarasin economist Jan Poser.
The franc has traded in a tight range of 1.20-1.25 francs since the Swiss National Bank set a cap of 1.20 francs to the euro on Sept. 6 to try and halt the rapid appreciation of the safe-haven unit.
Investors fleeing the ongoing euro zone crisis had propelled the franc to multiple record highs, putting pressure on Swiss exporters' margins and threatening the tip the country into recession.
In his first newspaper interview since taking chairmanship of the SNB on an interim basis, Thomas Jordan said the SNB would keep the franc capped against the euro for an open-ended period of time, adding there was "simply no alternative."
In a separate interview, Economy Minister Johann Schneider-Ammann said he expected the Swiss franc to weaken to about 1.40 francs per euro in the medium term.
By 0818 GMT the franc was little changed against the euro compared to the New York close, trading at 1.208 francs. The franc ticked higher against the dollar at 0.9335.
Comments
Comments are closed for this article.