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Friday, 10 December 2010 13:45

Franc Rises as ECB Meeting Doesn’t Provide Solution to Problems

Friday, December 03, 2010 5:28 AM

The Swiss franc gained against the euro as the meeting of the European Central Bank’s policy makers failed to provide the solutions to the European

sovereign-debt crisis. The currency also rose versus the US dollar after the report showed that the US jobless claims rose more than expected.

The claims for the unemployment benefits in the US increased to 436,000 last week from 410,000 in the week before. The analysts expected the increase only to 425,000. Tomorrow’s report expected to show that the unemployment rate remained unchanged at 9.6 percent.

The euro initially strengthened against the franc as Spain sold €2.5 billion ($3.3 billion) of notes maturing in October 2013. The meeting of the ECB didn’t provided the clear way out of the current debt troubles of the European Union, disappointing the traders who expected it to show some solution to the problems. It looks like the speculator put too much hopes in the ECB meeting, which were priced in the euro, and now the European currency may take a hit. The ECB President Jean-Claude Trichet said that the stimulus measures will continue “with full allotment as along as needed, and at least until April 12″ and that the bond purchasing program is “not quantitative easing, we’re withdrawing all the liquidity”. European Union’s interest rate remained unchanged at 1.00 percent.

USD/CHF fell from 1.0022 to 0.9928 as of 23:58 GMT today. EUR/CHF dropped from 1.3165 to 1.3117 after it rose to the intraday high of 1.3205 and fell to the intraday low of 1.3069.

If you want to comment on the Swiss franc’s recent action or have any questions regarding this currency, please, feel free to reply below.