WASHINGTON (AP) - The Swiss franc is falling against other major currencies Tuesday on speculation that the Swiss central bank might weaken the currency against the euro.
Traders dumped francs in favor of euros and dollars. They cited two published reports that the Swiss National Bank might peg the euro at 1.25 Swiss franc, up from the current rate of 1.20 Swiss franc. That would make the franc less valuable relative to the euro, the dollar and other currencies.
The SNB wants to limit the franc's strength to protect Swiss companies. Ratcheting that up to 1.25 Swiss franc would provide additional help for companies that are struggling because of the franc's continued strength. A too-strong franc hurts Swiss exporters by making their goods appear more expensive to foreign buyers.
The franc surged this summer as traders dumped euros and dollars. Weak economic news from the U.S., Germany and France made their currencies less attractive. The franc is seen as a safe bet because of Switzerland's relatively strong, stable economy.
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Switzerland’s central bank signaled Thursday it was prepared to consider temporarily pegging the nation’s “massively overvalued” currency to the euro.
The move would be in response to the global financial crisis that has increased the value of the Swiss franc, which investors consider a safe haven, to levels that are endangering Switzerland’s economy.
A peg would require changing the Swiss constitution and it would mean the Swiss central bank would risk relinquishing some of its independence to the European Central Bank.
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Gold appreciated an average of 3.4% against most currencies through the first half of 2011. This is the list of the top twenty currencies that have outperformed gold as of the end of the Q2 2011.
| NZD |
New Zealand dollar |
0.4% |
| SEK |
Swedish Krona |
0.5% |
| BRL |
Brazilian Real |
0.5% |
| MAD |
Moroccan Dirham |
0.7% |
| MUR |
Mauritian Rupee |
1.2% |
| ALL |
Albanian Leke |
1.5% |
| PLN |
Polish Zloty |
2.0% |
| NOK |
Norwegian Kroner |
2.1% |
| COP |
Columbian Peso |
2.3% |
| XAF |
CFA BEAC Franc |
2.3% |
| COM |
CFP Franc |
2.3% |
| EUR |
Euro |
2.3% |
| DKK |
Denmark Krone |
2.3% |
| HRK |
Croatian Kuna |
2.4% |
| BGN |
Bulgarian Leva |
2.6% |
| RUB |
Russian Ruble |
3.3% |
| RON |
Romanian New Lei |
3.4% |
| CHF |
Swiss Franc |
4.8% |
| CZK |
Czech Republic Koruna |
5.0% |
| HUF |
Hungarian Forint |
6.8% |
Source: GoldSilver.com
View the full list of international currency codes.
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