An exchange traded fund tracking the Swiss franc’s fluctuations against the dollar was down about 1% on Wednesday after the Swiss National Bank unveiled new measures to halt the currency’s surge.
“The substantial rise in risk aversion on the international financial markets has further intensified the overvaluation of the Swiss franc in the last few days,” the SNB said in a statement Wednesday.
The central bank said it will again boost the supply of liquidity to the money market, and will conduct foreign exchange swap transactions.
“The massive overvaluation of the Swiss franc poses a threat to the development of the economy in Switzerland and has further increased the downside risks to price stability,” it said. “The SNB is keeping a close watch on developments on the foreign exchange market and on financial markets. If necessary, it will take further measures against the strength of the Swiss franc.”
CurrencyShares Swiss Franc Trust (NYSEArca: FXF) rallied to a new all-time high on Tuesday after the Federal Reserve signaled it would keep its key interest rate near zero at least until mid-2013. [Swiss Franc ETF Jumps]