On Tuesday, the Swiss franc hit its lowest level against the Euro in over two years.
The franc, typically advances in times of crisis fell half a percent to 1.1565 francs per euro in London trade, the lowest since January 2015. That was when the Swiss central bank released the franc’s “cap” against the euro.
Swiss currency has declined over than 8 percent against the euro year to date. Which prompted the Swiss National Bank to change its perception of the franc’s over-valuation last week.
By removing the idea that the franc was “significantly over-valued”, the central bank is now stating that the currency remained “highly valued”.
Analysts stated that the change in language should not be perceived as a departure from the SNB’s lax monetary policy. The central bank has retained their negative interest rates.
“(The SNB is) in no rush to tighten policy, so with central banks like the ECB (European Central Bank) and the BoE (Bank of England) last week moving closer to tightening policy, that is starting to feed through some downward pressure on the Swiss franc,” stated by Lee Hardman, currency strategist with MUFG.