The Swiss franc weakened against the dollar and the euro on speculation the central bank will take further steps to curb the currency's appreciation.
The franc declined against most of its 16 major peers tracked by Bloomberg. Finance Minister Eveline Widmer-Schlumpf said on Wednesday she's ‘concerned' about the franc's strength and that the government supports all Swiss National Bank measures to weaken the currency. The SNB has said policy makers are assessing various options to that end, including a temporary currency peg to the euro.
"The market appears to be reluctant to test the SNB's resolve," said Jane Foley, a senior currency strategist at Rabobank International in London. "But the SNB will have to come up with some major steps fairly soon. It can't go on making an empty threat or the market will lose its patience and start piling into the franc again."
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The Swiss currency weakened 0.7 per cent to 79.56 centimes per dollar in London and depreciated 0.4 per cent to 1.1439 francs (Dh5.29) per euro. One franc fetched 96.27 yen, 0.7 per cent lower than Thursday's close. The franc strengthened 12 per cent this year, making it the best performer among ten developed-market currencies, according to Bloomberg Correlation-Weighted Currency Indexes.
The central bank said it will raise banks' sight deposits, or money that can be accessed immediately, to 200 billion francs from 120 billion francs.