The Swiss franc was the worst performer versus the dollar and euro among major currencies after the country’s central bank said the recent appreciation versus the euro poses a threat to economic growth this year. The currency slid against all of its 16 most actively traded counterparts monitored by Bloomberg, losing most against South Korea’s won and the New Zealand dollar. It tumbled versus the euro for a fourth consecutive day. The currency’s gains are posing an “extraordinary challenge” to some exporters, Swiss National Bank Vice President Thomas Jordan said at an event in Reichenau, Switzerland, late yesterday. Jordan refused to say whether the bank is considering a renewed round of foreign-currency purchases to weaken the franc. “The recent appreciation of the franc is clearly a big concern to the Swiss National Bank,” Peter Rosenstreich, chief market analyst at ACM Advanced Currency Markets, said by phone from Geneva. “The exodus that we’re seeing from the Swiss franc around these comments shows the nervousness of the market to any possible intervention.” The Swiss currency depreciated as much as 1.1 percent to 1.2836 per euro. It traded 0.8 percent weaker at 1.2792 as of 10:52 a.m. in London, taking its four-day slide to 2.5 percent. The franc slid 0.6 percent to 97.24 centimes to the dollar. SNB spokesman Nicolas Haymoz declined to comment on the franc’s moves today. ‘Enormous Interest’ The franc has still appreciated almost 8 percent against the euro since the start of November. It reached a record 1.2402 on Dec. 30 as Europe’s worsening sovereign-debt crisis encouraged purchases of assets perceived as the least risky. “Volatility has strongly increased” because of the European debt crisis, and Switzerland has “an enormous interest for Europe to solve its debt problems” as a worsening crisis would likely push the franc higher, Jordan said last night. The SNB spent more than a year intervening in currency markets to weaken the franc and head off deflation risks before abandoning the policy in June. The central bank said on Dec. 24 that it was ready to “take the measures necessary” to counter any deflationary threats. “There is a big difference between saber-rattling and actual physical intervention,” said ACM’s Rosenstreich. “The cost and effectiveness of intervention is very questionable.” There is likely to be “more verbal intervention and rhetoric” from the Swiss central bank before any actual physical intervention occurs, he added. Labor, Business Talks Swiss policy makers are scheduled to hold talks with labor unions and businesses tomorrow to discuss the impact of the stronger franc on the economy, NZZ am Sonntag reported last weekend, without saying where it got the information. SNB spokesman Haymoz declined to comment on the issue. “The Swiss franc can strengthen a bit further,” Marc Chandler, the New York-based global head of currency strategy at Brown Brothers Harriman & Co. said in an interview with Bloomberg News in London yesterday. “It’s the place people go for safety. It wouldn’t surprise me to see another 5 to 7 percent appreciation of the Swiss franc over the coming months as the European debt crisis heats up again.” To contact the reporter on this story: Garth Theunissen in London gtheunissen@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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