The Swiss franc weakened against the euro after Japan’s pledge to buy part of a bond issue aimed at stemming Europe’s debt crisis curbed investors’ appetite for the safest assets.
The Alpine nation’s currency was little changed against the dollar. Japanese Finance Minister Yoshihiko Noda said his country, holder of the world’s second-largest foreign-exchange reserves, will buy bonds issued by Europe’s financial-aid funds in the wake of bailouts for Ireland and Greece.
“The comments by Japan that they’ll be supportive of euro bonds have reduced the attractiveness of the Swiss franc as a haven asset,” said Kenneth Broux, a senior market economist at Lloyds TSB Corporate Markets in London. Japan’s statement has prompted an “unwinding of short euro positions,” he said. A short position is a bet an asset will weaken.
The franc fell 0.2 percent to 1.2556 per euro at 12:16 p.m. in London and earlier slid as much as 0.4 percent, reaching its weakest intraday level in three days. Against the dollar, the Swiss currency traded at 96.69 centimes.
“The comments by Japan that they’ll be supportive of euro bonds have reduced the attractiveness of the Swiss franc as a haven asset,” said Kenneth Broux, a senior market economist at Lloyds TSB Corporate Markets in London. Japan’s statement has prompted an “unwinding of short euro positions,” he said. A short position is a bet an asset will weaken.
The franc fell 0.2 percent to 1.2556 per euro at 12:16 p.m. in London and earlier slid as much as 0.4 percent, reaching its weakest intraday level in three days. Against the dollar, the Swiss currency traded at 96.69 centimes.
Source : Garth Theunissen
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