The Swiss franc has been lower in currency trading on the FX market recently — and that’s just how officials in Switzerland want it. Indeed, many countries want weak currencies during times of recession. Switzerland is just one of the few willing to intervene in order to get a lower currency.
In the first quarter of 2009, the Swiss National Bank bought $5.84 billion worth of euros in order to help keep its currency lower. The hope was also to help stave off deflation in the economy. Bloomberg reports on the activities of the Swiss in forex trading:
“It shows that they intervened in March,” said Marcus Hettinger, a currency strategist at Credit Suisse in Zurich. “That’s a pretty big move in euro holdings in the quarter. The stronger the franc gets, the greater the risk they’ll intervene again.”
It is clear that Switzerland is no longer content to offer the safe haven currency of choice; indeed, it appears that the Swissie is likely to be kept artificially low for the duration of the recession.
See Also
- Trade the Swissie in Forex Trading
Currency trading on the FX market