Forex - Dollar mixed as Swiss franc tumbles on SNB intervention
Investing.com
Published Sep 06, 2011 08:20AM ET
During European afternoon trade, the greenback was sharply higher against the Swiss franc, with USD/CHF leaping 8.41% to hit 0.8533.
The SNB set a minimum exchange rate target of 1.20 per euro for the Swiss franc and said it was prepared to defend this level by purchasing foreign currency in unlimited quantities.
The central bank said the massive overvaluation of the franc posed an acute threat to the Swiss economy and carried a risk of deflation.
The announcement came after official data showed that Swiss consumer price inflation fell 0.3% in August, after dropping by 0.8% the previous month, surpassing expectations for a 0.2% decline.
The Swissie was also sharply lower against the euro, with EUR/CHF jumping 8.52% to hit 1.2043.
Elsewhere, the greenback inched higher against the euro, with EUR/USD dipping 0.04% to hit 1.4091.
The single currency remained under pressure amid worries that the region’s sovereign debt crisis is deepening.
Meanwhile, official data showed earlier that German factory orders fell significantly more-than-expected in July, dropping for the first time in four months on the back of a decline in export demand.
The greenback was higher against the pound and the yen, with GBP/USD shedding 0.30% to hit 1.6068 and USD/JPY climbing 0.57% to hit 77.32.
In addition, the greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD adding 0.22% to hit 0.9927, AUD/USD dipping 0.03% to hit 1.0547 and NZD/USD shedding 0.25% to hit 0.8300.
Earlier Tuesday, the Reserve Bank of Australia left its interest rate on hold at 4.75%, and indicated that rates are likely to remain on hold in the coming months amid concerns over the outlook for global growth.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, advanced 0.58% to hit 75.66.
Later Tuesday, the Institute of Supply Management was to produce a report on U.S. service sector activity.
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Written By: Investing.com
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