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Forex - USD/CHF surges as SNB considering further measures

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Forexpros - The U.S. dollar was up sharply against the Swiss franc on Thursday, after comments from Swiss National Bank Vice President Thomas Jordan fuelled speculation the central bank would introduce further measures to weaken the currency.

USD/CHF hit 0.7401 during European morning trade, the highest since August 9; the pair subsequently consolidated at 0.7394, surging 1.76%.

The pair was likely to find support at 0.7066, the low of August 9 and the all-time low and short-term resistance at 0.7591, the high of August 9.

SNB Vice President Thomas Jordan said earlier that the central bank could further ease monetary policy without having to intervene in the currency market to curb the franc's recent gains.

The comments added to speculation that the SNB could introduce some kind of negative interest rate to dampen the appeal of the soaring Swissie.

"The excessive liquidity in the franc is increasingly growing through our measures and the holding of francs is becoming increasingly unattractive," Jordan said.

Meanwhile, central bank officials declined to comment on speculation that Swiss lenders might start charging 1% on franc deposits from as early as next week.

On Wednesday, the central bank announced that it would take additional measures, including increasing liquidity to the money market and conducting foreign exchange swap transactions to curb recent gains in the Swissie.

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

The Swissie was also down heavily against the euro, with EUR/CHF soaring 1.91% to hit 1.0499.

Later in the day, the U.S. was to release official data on its trade balance, as well as a government report on initial jobless claims and natural gas stockpiles.

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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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