The franc tumbled, dropping the most ever against the euro, after the Swiss central bank imposed a ceiling on the currency’s exchange rate and said it will defend the target with the “utmost determination.”
The yen retreated against its most-traded counterparts after Japan’s Finance Minister Jun Azumi said he will lobby Group of Seven officials that a strong yen is bad for the global economy. The euro fell for the sixth day against the dollar, the longest losing streak since April 2010. The Norwegian krone surged as investors sought an alternative to the franc.
“They have taken out one of the key safe-haven currencies,” said Simon Derrick, chief currency strategist at Bank of New York Mellon in London, in an interview on Bloomberg Television’s “Midday Surveillance”. “Yes it’s not a peg, yes they’re setting a floor on this, but as soon as people get a good sense of how far the SNB can drive it then they’re going to start very quickly to fight against them.”
The franc dropped 8.8 percent versus the euro to 1.20697 at 5 p.m. in New York, after earlier depreciating 9.9 percent to 1.21911, the lowest level since July 5. It weakened 9.5 percent to 86.21 centimes per dollar.
Switzerland’s currency fell at least 8.2 percent against all 16 of the most-active currencies. The euro fell 0.7 percent to $1.3998, touching the least since July 13. The dollar rose 1 percent to 77.66 yen.