Swiss franc surges 30 per cent after central bank ends artificial cap designed to prop up euro
A day after the biggest single-day move for a major currency in modern memory, the shockwaves of Switzerland's move to end its euro peg continued to reverberate Friday.On Thursday, the Swiss Central Bank ended its three-year policy of pegging the value of the Swiss currency, the franc, to the euro. Since 2011, the bank has pledged to never let the value of the euro dip below 1.20 francs. It achieved that by buying up euros, which pumped up the euro's value and held the franc's value much lower than it would have been, if left to free market forces.
Switzerland has long been seen as a safe haven, a good place to keep money during fearful times. In many ways that's a good thing for a country, but it actually hurts exporters because it makes their goods and services — in Switzerland that's things like chocolate, watches, pharmaceuticals and ski vacations — a lot more expensive for foreign customers to buy.
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