The Swiss franc rose today against the euro on the speculation that the austerity measures would cripple the economic recovery in Europe and that the Swiss National Bank would raise the interest rates before the European Central Bank. The franc fell versus the US dollar.
Manuel Oliveri, the strategist at UBS, said:
Austerity measures will hamper growth in Europe, put pressure on the single currency and support the franc. Even if concerns have waned that the euro area may break up, growth expectations in Europe are subdued compared to Switzerland.
The unemployment rate in Switzerland fell to 3.8 percent in the previous month. The Swiss economy expected to grow by 2 percent, twice as much as European Union’s. The fast economic growth led to the speculation that the SNB would raise would increase the interest rates before the ECB, which isn’t expected to raise its main rate from 1 percent until the third quarter.
USD/CHF traded at 1.0528 today as of 15:29 GMT after opening at 1.0496. EUR/CHF fell from 1.3467 to 1.3435, following the surge to 1.3538.
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