Swiss franc hits all time highs versus euro, dollar

The Swiss franc strengthened against the euro on Monday, pushing back towards its December 30 all-time high and recovering losses incurred in thin New Year's Eve trading as traders covered short euro positions. A story in Britain's Telegraph newspaper saying European debt markets could face another crisis in months was taken as a cue to sell the euro, market players said.
The franc drifted lower against the dollar, pulling away from an all time low of 0.9301 francs to the dollar struck on the last day of 2010. "With many participants still on holiday we expect a rather illiquid market, which could produce a repeat of last week, with the franc strong as risk aversion and the eurozone debt crisis remain in focus," said Commerzbank forex analyst You-Na Park.
"Some degree of correction is possible, as the rise in the franc has been strong in last two weeks for no special reason, but the crisis is still the one factor dominating the market, so the franc should stay stronger in the next couple of weeks." The franc pushed higher against the euro compared to the New York close, trading at 1.2422 francs per euro at 0754 GMT, just off the record 1.24 level hit last Thursday.
The franc was weaker against the dollar at 0.9366 francs per dollar, still well within striking distance of its all-time high. Analysts see little likelihood of the Swiss central bank renewing its pledge to intervene in currency markets to fight excessive appreciation of the franc, a policy it dropped last June.
The Swiss National Bank lost nearly 11 billion Swiss francs ($11.77 billion) on its currency reserves in the fourth quarter due to the franc's rapid rise against major currencies, a paper reported on Sunday based on its own calculations. The Swiss central bank would likely post a full-year book loss of 32 billion francs, its largest ever, the newspaper Sonntag said.
The SNB has been criticised for running up massive losses on its holdings in its bid to combat a big appreciation of the Swiss unit against the euro. The central bank, which dropped its pledge to intervene in June, recorded exchange-rate related losses of 21.2 billion francs in the first nine months of the year. The SNB's foreign currency reserves crept up to 212.4 billion Swiss francs at the end of November from 211.9 billion at the end of October, data published by the SNB showed. The SNB was unavailable to comment.