Initially, dollar and euro also fell to an all-time low against franc after the Fed statement on keeping rates near zero for two years. The situation changed when Swiss National Bank announced is taking additional measures against its currency strength and Swiss franc dipped as well.
RON continued to depreciate against Swiss franc, touching yesterday a new record low of 4.0865 units, from 4.0221 units Tuesday, according to Romanian central bank’s (BNR) reference. However, RON traded in ranges against the euro and BNR’s reference strengthened slightly Wednesday to 4.262 units, from 4.267 units a day earlier. Against the US dollar, RON’s indicative won nearly 0.9 pc on the day at 2.9629 units. The dollar stayed weak on Wednesday after the U.S. Federal Reserve said it would keep rates near zero for two years, while the Swiss franc inched down on the back of further official steps to try and turn back its rise, Wall Street Journal informs. The Fed’s extraordinary pledge sparked a rebound in riskier currencies such as the Australian dollar, helping them recover from recent steep falls. The euro was also off its recent lows but remained vulnerable to concerns about the euro zone’s now broad-based debt crisis, despite the European Central Bank’s move to ease some of the pressure by buying peripheral debt.
These concerns, coupled with worries that the U.S. economy would stay weak despite the Fed’s pledge, kept demand for the safe-haven Swiss franc and yen high.
Initially, dollar and euro also fell to an all-time low against franc after the Fed statement on keeping rates near zero for two years. The situation changed when Swiss National Bank (SNB) announced is taking additional measures against its currency strength and Swiss franc dipped as well. SNB expanded liquidity operations and vowed to take further measures against the strength of the Swiss franc, but analysts and traders believed it would do little to stem the franc’s surge towards parity against the euro.
The substantial rise in risk aversion on the international financial markets has further intensified the overvaluation of the Swiss franc in the last few days.