Swiss Franc Extends Decline On Suspected SNB Intervention

The Swiss franc continued to trade lower against its major rivals on Thursday's European deals, amid market rumors of the Swiss National Bank's intervention in the forex market.

In an interview with the Tages-Anzeiger newspaper on Tuesday, the Swiss National bank's Vice President Jean-Pierre Danthine told that he is not comfortable with the currency's current exchange rate level and is prepared to intervene on foreign exchange market.

Data earlier this week suggested the central bank might have been intervening to weaken the franc even after it removed the cap.

In mid-January, the SNB scrapped its 3-1/2-year old cap on the franc to the euro as it was forced to intervene increasingly in the currency markets.

The decision was made on prospects of quantitative easing by the European Central Bank, which will further affect the Swiss franc.

The franc slipped to 2-week lows of 0.9239 against the greenback, 127.55 against the yen and 1.3977 against the pound, compared to Wednesday's closing values of 0.9045, 129.70 and 1.3693, respectively. If the franc continues slide, it may find support around 0.93 against the greenback, 1.42 against the pound, 122.00 against the yen.

The franc hit a 2-week low of 1.0446 against the euro, off early high of 1.0203. At yesterday's close, the pair was worth 1.0209. The next likely support for the franc is seen around the 1.20 region.

Survey data from the European Commission showed that the Eurozone economic confidence index climbed to 101.2, the highest since July, from 100.6 in December. It was forecast to rise to 101.6.

Looking ahead, U.S. pending home sales data for December and U.S. weekly jobless claims for the week ended January 24 are scheduled for release shortly.

At 11:30 am ET, European Central Bank Executive Board member Benoit Coeure will take part in a panel discussion on "The future of Euro" organized by the Innocenzo Gasparini Institute for Economic Research and Centre for Applied Research at Bocconi University in Milan, Italy.