The Swiss franc declined further against the other major currencies in New York deals on Monday, in response to comments by the Vice President of the Swiss National Bank Fritz Zurbruegg that the central bank would continue to be active in defending high appreciation of the franc by analysing the impact of European Central Bank’s stimulus measures.
In an interview with Zentralschweiz am Sonntag newspaper on Sunday, Zurbruegg told that the franc is highly overvalued, and the bank would take into account the monetary policy measures of the ECB and its implications in Switzerland at its monetary policy review in December.
“You can’t tell in advance how low you can go with negative rates,” he said. “Rates will stay low as long as it is necessary for monetary policy.”
The franc has been trading lower in European deals, amid market rumors that the SNB may consider further policy measures, if ECB adds stimulus in December meeting.
The franc weakened to more than a 3-week low of 122.96 against the yen and a 4-day low of 1.0835 against the euro, reversing from its previous highs of 124.12 and 1.0759,respectively. The next possible support for the franc may be located around 122.00 against the yen and 1.095 against the euro.
The franc fell to more than 4-week low of 0.9839 against the dollar and near a 5-week low of 1.5080 against the pound, coming off from its prior high of 0.9757 and a 4-day high of 1.4953, respectively. If the franc declines further, it may challenge support around 1.00 against the greenback and 1.52 against the pound.
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