Swiss Franc soars as SNB pulls plug on currency capContributor JPMAM UK
The Swiss National Bank (SNB) today unexpectedly abandoned its minimum exchange rate for the Swiss franc vs. the euro. The SNB said the cap, which was introduced in September 2011, was no longer justified. However, the announcement has shocked markets, with the Swiss franc soaring by as much as 30% against the euro and US dollar in chaotic trading. The SNB is lowering interest rates significantly to ensure that the discontinuation of the minimum exchange rate does not lead to an inappropriate tightening of monetary conditions.
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