The Swiss franc fell to a new 9-year low against the euro on Thursday as investor appetite for riskier carry trades returned. "Markets are euphoric again," said Sandro Baechli, analyst at Clariden Leu. "Risk appetite is higher and carry trades are on the rise."
The franc was 0.1 percent weaker against the euro at 1.6725 per euro, after hitting a new 9-year low at 1.6747 earlier in the session. The franc rose 0.2 percent against the dollar to 1.1799 per dollar.
After a brief recovery in the wake of the credit crisis, the Swiss franc has resumed its downtrend against the euro as investors return to riskier carry trades, making use of the country's low benchmark interest rate of 2.75 percent.
Clariden Leu analyst Baechli said the Swiss National Bank could stay relaxed over the franc's fall at the moment. "We don't think that SNB interventions are necessary," Baechli said. "The weak franc is positive for the economy and we don't see inflationary threats." Markets have taken a lack of SNB comments as a sign that it would not try to stem the franc's fall with the same fervour as in spring.