Swiss franc surges to a record high against euro

THE Swiss franc surged to an all-time high against the euro yesterday as fears over the potential for a double-dip recession continued to drive investors into perceived safe-haven assets.
The franc traded at €1.300 yesterday, within sight of the record level of €1.2968 hit earlier in the session. And yields on 10-year Swiss bonds fell to 1.02 per cent as weaker-than-expected US new-home sales and durable goods orders intensified the flight out of equity markets.

The franc’s rise accelerated after the Swiss National Bank dropped its pledge to intervene in the currency markets at its June meeting, saying that deflation risks had largely disappeared and the economy was on track for a healthy recovery.

The Dow Jones was off as much as 103 points at one stage, before rallying to close up 19.6 points – or 0.2 per cent – at 10,060, while the broader S&P 500 index gained 0.3 per cent, ending four straight days of losses.

The FTSE 100 index closed 0.9 per cent down at 5,109.40, Germany’s DAX fell 0.6 per cent and Tokyo’ Nikkei dropped 1.7 per cent to hit a 16-month low of 8845.39.