The exchange traded fund pegged to the Swiss franc could see action Friday after Swiss National Bank President Thomas Jordan said the central bank could intervene in currency markets again to subdue the currency’s rise, which is hurting the economy.
The SNB president reiterated the central bank’s pledge to enforce the minimum exchange rate with utmost determination, Dow Jones Newswires reported Friday.
Last year, the SNB said it would “no longer tolerate” a euro/franc exchange rate below 1.20. [Swiss Franc ETF in Focus After SNB Move]
The Swiss franc is seen as a safe-haven currency and rose sharply during most of 2010 and 2011 on the Eurozone debt crisis. It fell hard last summer when the SNB acted to cool the currency.
However, CurrencyShares Swiss Franc Trust (NYSEArca: FXF) has been creeping higher in recent months after hitting bottom in early 2012. FXF follows the movement of the franc against the U.S. dollar.
If the currency continues to rise it would “again expose Switzerland to considerable risks and, once more, endanger both price stability and the stabilization of the economy,” Jordan said.
“We are acutely aware that considerable challenges still remain for the Swiss economy, despite the minimum exchange rate,” Jordan told SNB shareholders on Friday, according to a Bloomberg News report.
CurrencyShares Swiss Franc Trust
