ZURICH (Reuters) – The Swiss franc rose to its highest level against the euro in almost a decade on Monday as heavy stock market losses, worries about U.S. and global growth and tensions in the Middle East sent investors to the safe haven pulled. .
The franc has risen about 3.5% against the euro since the US Federal Reserve kept interest rates on hold last week.
Early on Monday, the franc rose to 1.0856 euros, its highest level since January 2015, when the Swiss National Bank (SNB) removed a ceiling for the euro.
A spokesperson for the SNB declined to comment on the strength of the franc or whether the central bank could intervene in the market to halt the currency’s appreciation.
The SNB has cut interest rates twice this year amid concerns among Swiss producers that the currency’s strength was putting pressure on their key export activities.
UBS economist Maxime Botteron said that at a time when the SNB is cutting interest rates, the appreciation of the franc in recent days could prompt foreign currency purchases by the bank.
However, while policymakers are seriously concerned about the currency’s strength, the bank still had room to cut rates below 1.25% at this time, Botteron added.
“If at all, foreign currency purchases are therefore likely to be limited,” he said.
