ZURICH (Reuters) – The Swiss franc rose to its highest level against the euro in nearly a decade on Monday, as heavy losses in stock markets, concerns about U.S. and global growth and tensions in the Middle East lured investors to the safe-haven currency.
The franc has risen about 3.5% against the euro since the US Federal Reserve left interest rates unchanged last week.
The Swiss franc rose early Monday morning to 1.0856 euros, its highest level since January 2015, when the Swiss National Bank removed its exchange rate cap against the euro.
A spokesman for the Swiss National Bank declined to comment on the strength of the franc or whether the central bank could intervene in the market to stop the currency from rising.
The Swiss National Bank has cut interest rates twice this year amid concerns among Swiss manufacturers that the strong currency is putting pressure on their key export business.
UBS economist Maxime Bouteron said that while the Swiss National Bank is cutting interest rates, the rise in the value of the franc over the past few days could prompt the bank to buy foreign currencies.
However, if policymakers are seriously concerned about the strength of the currency, the central bank still has room to cut its benchmark interest rate below 1.25% for now, according to Bouteron.
“If that happens, foreign exchange purchases are likely to be limited,” he added.