Franc Follows Euro in Gains, EUR/CHF Closes Flat
The Swiss franc advanced, following the euro in gains. The Swissie fell versus the shared European currency itself, but quickly recovered and ended the session flat.
The European summit and agreements that European politicians reached during the meeting sparked euphoria among investors. The leaders of the European Union outlined steps for closer integration of the banking system of the Union. They also eased the debt burden on Spain by allowing banks direct access to the bailout funds. The lawmakers also dropped the legislation that made a government a preferred creditor in case banks would ask for an aid, a step that should encourage private sector to buy bonds and decrease borrowing costs.
The franc benefited from the rally of the shared 17-nation currency that followed the positive news. The Swiss currency was closely following the euro after it reached the cap set by the Swiss National Bank. The euro itself jumped versus the Swissie, yet quickly retreated and EUR/CHF closed flat near the SNB floor of 1.20 as it was usually doing since the beginning of April.
USD/CHF fell from 0.9651 to 0.9481. CHF/JPY spiked from 82.30 to 84.12. EUR/CHF surged from 1.2008 to 1.2037, but pulled back and closed at 1.2009.
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Earlier News About the Swiss Franc:
- Franc, SNB & Euro-Peg: Can Swiss Central Bank Maintain Ceiling? (2012-06-20)
- SNB Keeps Libor Unchanged, Reiterates Pledge to Keep Ceiling (2012-06-14)
- Franc Gains vs. Dollar, Tests Resolve of SNB to Keep Ceiling (2012-06-13)
- Franc Rebounds After Weber's Comments (2012-05-29)
- Spike of EUR/USD Leads to Speculation About SNB Intervention (2012-05-25)