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Forex - EUR/USD rallies to 2-day high after SNB curbs franc

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Forexpros - The euro rallied to a two-day high against the U.S. dollar on Wednesday, after Switzerland's central bank implemented measures to curb the franc's record gains against the euro and the U.S. dollar, lifting the single currency across the board.

EUR/USD hit 1.4344 during European early afternoon trade, the pair's highest since Monday; the pair subsequently consolidated at 1.4320, surging 0.82%.

The pair was likely to find support at 1.4142, the days low and a two-week low and resistance at 1.4453, Monday's high.

The Swiss National Bank narrowed its three-month Libor rate to 0.25% from 0.75% earlier, saying the currency was "massively overvalued" adding that it "won't tolerate" a "tightening of monetary conditions" and therefore was taking measures against the franc.

The SNB also said it will "significantly" increase the supply of liquidity to the Swiss franc money market over the coming days to help counter the currency's appreciation.

The central bank said the action came about after economic outlook "deteriorated substantially" following the franc's surge to a record against the euro and the dollar.

However the euro remained under pressure as a combination of generalized risk aversion and concerns over a slowdown in global growth sparked renewed fears over sovereign debt contagion to core economies in the single currency bloc.

The euro was also higher against the pound, with EUR/GBP rising 0.20% to hit 0.8733.

Later in the day, payroll processing firm ADP was publish a report on U.S. non-farm payrolls, while the U.S. Institute of Supply Management was to publish data on service sector growth.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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