Swiss Franc Weakens Against Majors

The Swiss franc drifted lower against its major rivals in European trading on Friday, as the investors speculate that the Swiss National Bank may respond with further measures to reduce the appreciation of its domestic currency, if the European Central Bank eases further.

Markets expect the ECB to ramp up its bond-buying stimulus programme next month, that may cause further appreciation of the franc against the euro. Market participants see a strong chance that the SNB might intervene in the forex market or cut rate further to keep a lid on the franc's gain.

In an interview with Swiss newspaper, the SNB President Thomas Jordan indicated that the negative interest rates and willingness to intervene in the currency market, in times of necessity, are the two pillars of the bank's monetary policy.

The European markets were trading mixed, amid unimpressive data from China and rising tensions between Russia and Turkey. However, data showing that eurozone economic confidence remained unchanged in November partly reassured investors.

The franc showed mixed trading in the Asian session. While the franc was slightly lower against the euro, it held steady against the greenback and the yen. Against the pound, it ticked up.

The franc fell to a weekly low of 1.5526 against the pound, while touching 1.0327 versus the dollar, its lowest since August 2010. On the downside, the franc is likely to find support around 1.565 against the pound and 1.05 against the greenback.

The franc slipped to a 1-1/2-low of 1.0922 against the euro and a 10-1/2-month low of 118.73 against the yen, from its previous highs of 1.0852 and 119.86, respectively. If the franc falls further, 1.10 and 116.00 are seen as its next support levels against the euro and the yen, respectively.