Swiss Franc Collapses 7% – Swiss National Bank to Fix CHF to EUR and Debase Currency

Tuesday, September 6, 2011
By Paul Martin

by Tyler Durden
ZeroHedge.com
09/06/2011

Currency markets have seen massive volatility this morning after the Swiss National Bank decision to fix the Swiss franc to the euro. Just prior to the announcement, spot gold for immediate delivery had risen to a new record nominal high of $1,921.15/oz in early morning trading in Europe. Then just before 0900 hours GMT came the news that the Swiss National Bank has decided to fix the country’s exchange rate at 1.20 Swiss francs per euro. The SNB indicated it would buy an unlimited amount of euros regardless of the risk to maintain that value. In a matter of minutes, gold fell 3% from the high of $1,921.15 to an inter day low of $1,862.72. It then recovered as quickly and surged back to over $1,912/oz. Gold’s London AM fix this morning was USD 1,891.00, EUR 1,330.75, GBP 1,172.86 per ounce. Gold fixed lower in all currencies (USD 1,896.50, EUR 1,341.13, GBP 1,174.67 per ounce). The SNB announced the currency fix because of what it called “the current massive overvaluation of the Swiss franc.” It said it will “no longer tolerate” an exchange rate below the minimum rate of 1.20 francs, which it said is still high.

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