CurrencyShares Swiss Franc Trust (NYSEArca: FXF) climbed 1.1% in premarket trading Wednesday after the Swiss National Bank said it will take further steps to cool the franc’s rise but didn’t announce a peg to the euro as some had speculated.
After a rapid spike, the Swiss franc exchange traded fund has fallen sharply the past few days following reports the SNB was considering temporarily pegging the currency to the euro. The ETF follows the franc’s movements against the U.S. dollar. [Swiss Franc ETF Drops on Euro Peg Reports]
“The measures taken thus far by the Swiss National Bank against the strength of the Swiss franc are having an impact. Nevertheless, the Swiss franc remains massively overvalued,” the SNB said in a statement Wednesday.
“The SNB has therefore decided to expand again significantly the supply of liquidity to the Swiss franc money market. In so doing, it is increasing the downward pressure on money market interest rates with a view to further weakening the Swiss franc exchange rate,” it added. “Furthermore, the SNB reiterates that it will, if necessary, take further measures against the strength of the Swiss franc.”
CurrencyShares Swiss Franc Trust is up 17.3% so far this year even with this month’s sharp pullback, according to Morningstar. The currency has rallied amid the flight to safety and the Eurozone debt crisis.