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Swiss franc nears 3-year high after U.S. adds it to watchlist - REUTERS

JANUARY 16, 2020

BY  Yoruk Bahceli, John Revill


LONDON/ZURICH (Reuters) - The Swiss franc hit its strongest against the euro in almost three years on Tuesday after the United States added Switzerland to its watchlist of currency manipulators.

The franc had been firmer throughout the day, then gained further in European mid-morning trade, well after the U.S.

(Graphic: Swiss franc rallies click, here)

Reuters GraphicJPY=EBS, were down on Tuesday.

The U.S. inclusion of Switzerland on the list could encourage hedge funds to once again test how far they can push the franc higher before the SNB intervenes.

MORE HANDS-OFF

The United States also encouraged the Swiss authorities to publish all intervention data more frequently.

As well as intervening directly, the SNB has also imposed the world’s lowest interest rates to deter investors.

The SNB has always stressed its policy objective is ensuring price stability while taking due account of economic developments.

There have been some signs of a more hands-off approach by the SNB in recent months. Franc sight deposits at local banks, a proxy for measuring SNB interventions, have fallen, although this could be due to seasonal fluctuations.

(GRAPHIC - SNB Sight deposits have fallen in recent months: here)

Reuters Graphic

The U.S. trade deficit with Switzerland reached $2.3 billion in November. One of the criteria for inclusion on the watchlist is a bilateral trade surplus with the United States.

(Graphic: US trade deficit with Switzerland click, here)

Reuters Graphic

Additional reporting by Sujata Rao; Writing by Tommy Reggiori Wilkes; Editing by Michael Shields and Philippa Fletcher

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