Bold move by Swiss National Bank may not halt rise of franc

Last week's decision by the Swiss National Bank to cap its exchange rate to a minimum of CHF1.20 to the euro will not rescue the Swiss economy, said Jennifer McKeown, senior European economist at Capital Economics.

The Swiss currency dropped 9% in reaction to the move, settling around the 1.20 target price, having previously been at record highs. Concerns had been mounting over the summer as the franc strengthened against the euro, dollar and sterling, driven up by as investors who sought safe havens from volatile equities. It reached CHF1.048 against the euro on 9 August. But McKeown said the SNB’s move would not work to derail the currency’s upward path: “In the end, there may be limits to how many francs the Bank is prepared to ‘print’, implying the currency might renew its ascent in time,” s...