The Swiss franc dropped against a board of major currencies on Tuesday after investors speculated that the Swiss central bank may take steps to weaken its currency against the euro.
The speculation comes after a number of publishers reported that the Swiss National Bank may make its currency less valuable by pegging the euro at 1.25 Swiss franc’s, slightly higher than the current rate of 1.20 Swiss franc’s.
The move by the Swiss National Bank comes after global economic fears lead investors to jump behind the Swiss currency as a safe haven investment, therefore forcing the Swiss franc higher. That has in turn hurt Swiss companies that export goods to customers holdings foreign currencies as it makes it more expensive for them to purchase Swiss made goods.
The euro has struggled against other major currencies as its nations struggle to overcome the debt crisis which has rippled through the economy and jitters that Greece could default on its debt obligations have lead investors away from the euro to other safer currencies such as the Swiss franc.
The U.S. dollar rose to 0.8889 Swiss franc on Tuesday while the france rose to 1.2165 against the euro.
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