Martin Meissner
The euro has fallen to its lowest level against the franc since summer 2015. (Icon)
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The weakness of the euro is fatal for the Swiss National Bank (SNB). At least that’s what analysts at Commerzbank in Germany believe. “Speculators are increasingly likely to lick blood at the current euro-franc exchange rates and be tempted to test the SNB’s will to limit another franc strength,” says a comment. In other words, the pressure on the SNB could increase significantly.
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The Commerzbank analysts continue to point out that the weak euro and not a strong franc is currently the primary factor driving the exchange rate. It will be critical for the SNB if a strength of the Swiss franc is mixed with the weakness of the euro. At 0.9774 francs, however, the US dollar is within its most recent range.
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On January 15, 2015, the Swiss National Bank (SNB) lifted the minimum exchange rate of CHF 1.20 per euro, which it had previously defended for over three years. The euro then briefly fell below parity, but then rose as the global economy recovered – to a rate of 1,2006 on April 20, 2018.
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Since then, the euro has weakened again against the franc, despite the fact that the SNB is using currency interventions to limit the damage to the export-oriented Swiss economy.
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At 1.0622 francs, the euro hit a rate on Thursday morning that it had last seen four and a half years ago or in summer 2015.
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