FX round-up: Euro slides to multi-year lows after shock Swiss National Bank decision
The dollar, along with all major currencies, was in turmoil on Wednesday after the Swiss National Bank (SNB) slashed its former exchange rate of 1.20 francs to the euro.
The bank’s decision came ahead of next week’s European Central Bank (ECB) meeting where it is expected to start buying government bonds, otherwise known as quantitative easing (QE), to boost the weakened European economy.
IG analyst Alastair McCaig said: “Considering the SNB's comments only a month ago about continuing to hold this line in the sand, any lingering doubts that the ECB will embark on QE next week have all but evaporated. Today’s actions by the Swiss had the distinct look of someone jumping before they were unceremoniously pushed.”
The dollar index, which measures the US currency against a basket of six others, grew 0.09% to $92.17 despite the turmoil.
The euro dropped down to $1.1566 following the surprise Swiss decision, plunging the currency into multi-year lows. It traded at an all-time low of 0.8321 francs earlier in the session.
Meanwhile, the dollar traded at 0.73 francs, which is the lowest it has traded against the franc since Switzerland took on the exchange rate with the euro in 2011.
Against the yen, the dollar fell again to ¥116.3030 following the US currency’s decline against the franc as it affected all major market pairs.