Swiss Franc ETF Higher After SNB Chief Steps Down
January 9th at 1:10pm by John Spence
The Swiss franc strengthened against the dollar on Monday after Swiss National Bank chief Philipp Hildebrand resigned amid a furor over currency trades made by the central banker and his wife.
CurrencyShares Swiss Franc Trust (NYSEArca: FXF) was up 0.3% at last check.
Hildebrand at a press conference Monday said it would be impossible to prove that his wife, Kashya, made profitable trades last year without his explicit consent, the Associated Press reported.
She sold francs and bought dollars in August just before the SNB moved to weaken the Swiss currency, The Wall Street Journal reported.
In September, the SNB set a floor on the euro/franc exchange rate at 1.20. “The current massive overvaluation of the Swiss franc poses an acute threat to the Swiss economy and carries the risk of a deflationary development,” the central bank said at the time. [Swiss Franc ETF in Focus After SNB Move]
The Swiss franc ETF spiked during the first half of 2011 but then fell sharply in the wake of the SNB moves to weaken the currency. The central bank in September promised to buy euros at “unlimited quantities” as a way to maintain a 1.20 franc price ratio. [Swiss Franc ETF Loses Strength After SNB Intervention]
The Swiss franc has languished because it is seen as a less desirable safe-haven asset following the currency interventions. [Currency Intervention Fears Weigh on Swiss Franc ETF]
CurrencyShares Swiss Franc Trust
Read the disclaimer; Tom Lydon is a board member of the funds for Rydex|SGI.
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