Swiss stoke fears of ‘currency wars'

The Swiss National Bank sparked talk of a global currency war yesterday when it intervened to weaken the Swiss franc, the first time a big central bank has intervened in the foreign exchange markets since Japan sought to weaken the yen in 2004.

The Swiss franc's haven status has been heightened by market turmoil, pushing it close to a record high of about SFr1.43 to the euro in the past few weeks.

But it fell to its lowest level this year yesterday after the SNB said the currency's strength represented an “inappropriate tightening of monetary conditions” as it battled against a slowdown in the Swiss economy.

“In view of this development, the SNB has decided to purchase foreign currency on the foreign exchange market to prevent any further appreciation of the Swiss franc against the euro,” the central bank said.

Traders confirmed that SNB had been active in the market, selling the Swiss franc against the euro and the dollar. The currency dropped 2.6 per cent to SFr1.5192 against the euro and 3.2 per cent to $1.1894 against the dollar.

Analysts said the move was likely to increase speculation that countries were set to engage in a bout of competitive devaluation.

“Let the currency wars begin,” said Chris Turner at ING Financial Markets.

Countries around the world faced with the constraint of zero interest rates might feel it was acceptable to weaken their currencies in order to ease monetary conditions, he said.

“Of course those with higher exports shares in GDP will have monetary conditions more sensitive to [foreign exchange] rates. Japan will probably be at the head of the queue.”

The SNB said economic conditions had deteriorated sharply since its last policy meeting in December and there was a risk of deflation over the next three years. “Decisive action is thus called for, to forcefully relax monetary conditions.”

The SNB also cut its interest rates by 25 basis points, taking its three-month Libor target range down to 0-0.75 per cent.

瑞士央行(Swiss National Bank)昨日出手干预，以压低瑞士法郎汇率，从而引发了有关一场全球货币战争的传言。这是自2004年日本试图压低日元汇率以来，一家全球主要央行首次在外汇市场进行干预。

市场动荡提升了瑞士法郎的避险地位，在过去几周内，推动瑞郎兑欧元汇率接近约1.43瑞郎的历史高位。

但在瑞士央行表示，在应对经济放缓之际，瑞郎强势意味着“不适当地收紧货币环境”之后，瑞郎汇率昨日跌至年内最低水平。

瑞士央行表示：“鉴于这种情况，瑞士央行决定在外汇市场买入外国货币，以阻止瑞郎兑欧元进一步升值。”

交易员证实，瑞士央行在市场中一直都很活跃，卖出瑞郎、买进欧元和美元。瑞郎兑欧元汇率下跌2.6%，至1.5192瑞郎；瑞郎兑美元汇率下跌3.2%，至1.1894瑞郎。

分析师表示，此举可能助长各国将开始一轮竞争性货币贬值的预期。

荷兰国际集团(ING)的克里斯•特纳(Chris Turner)称：“让货币战争开始吧。”

特纳表示，受到零利率约束的世界各国可能觉得，让本国货币贬值以放松货币状况是可以接受的。

“当然，那些出口在国内生产总值(GDP)中所占比重较大的国家，其货币状况可能对（汇率）更为敏感。日本可能首当其冲。”

瑞士央行称，自从去年12月份的上一次政策会议以来，经济形势急剧恶化，未来3年存在通缩风险。“因此要求采取果断行动，有力地放松货币环境。”

瑞士央行还降息25个基点，将其3个月期伦敦同行拆借利率(Libor)目标区间缩减至0-0.75%。

转自：FTChinese