The euro rose strongly across the board on Thursday, gaining more than 1 percent against the Swiss franc, as traders speculated that the Swiss National Bank was again buying euros in order to weaken the franc. Having fallen around two US cents late on Wednesday after the European Central Bank said it would no longer accept Greek bonds in return for funding, the euro gained around 0.7 percent versus the dollar on Thursday, trading at $1.1420.
Against the Swiss franc, the euro rose to 1.06425 francs, its strongest since January 15, when the SNB stunned markets by scrapping the three-year-old cap on its currency. Since then, there has been persistent talk that the SNB has still been intervening. Swiss newspaper Schweiz am Sonntag reported on Sunday that the SNB was informally aiming for a rate of 1.05-1.10 francs per euro, citing sources close to the bank. The SNB on Thursday again declined to comment on whether it was intervening in the market.
"I do think they (the SNB) are intervening at this point," said Peter Rosenstreich, chief FX analyst at Swissquote in Geneva. "But is this part of a managed strategy to control euro/Swiss (franc)? I think it's way too early to be discussing that. At this point they're just trying to stabilise the downside and take advantage of any opportunities to push (the euro) higher."
Against the yen, the euro was up 0.8 percent at 134.09 yen, still some way off a near two-week high of 135.35 yen set on Wednesday. The shared currency had earlier been lifted by data showing German industrial orders surged far more than forecast in December, hitting their highest level since April 2008. "We still think the main driver of the euro over the next few months will be QE, and policy divergence with the UK and the US," said Stephen Saywell, global head of FX strategy at BNP Paribas in London.
Losses against the euro helped the dollar fall around 0.7 percent against a basket of currencies, extending a more than 1.5 percent decline over the past two weeks. The Australian dollar also rose against the greenback, trading at $0.7811, up 0.8 percent on the day and edging further away from a six-year trough of $0.7627 set earlier in the week.
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