ZURICH: The Swiss National Bank intervened very little to weaken the Swiss franc during the first quarter of 2019, figures showed on Friday, as the safe-haven currency traded around its highest level in nearly two years.
Mounting tensions between the United States and Iran, along with dovish inclinations at the US Federal Reserve and the European Central Bank, have increased investor appetite for the franc in recent days.
The franc breached the 1.11 barrier versus the euro on Thursday, rising to its strongest since July 2017. On Friday, the Swissie traded at 1.1085 versus the single currency before giving up some of its gains to go back above 1.11 francs to the euro.
Swiss balance of payments data published on Friday showed a net acquisition of reserve assets by the SNB of 2.281 billion francs during the first three months of 2019.
The figure, a proxy for currency market interventions, also includes the reinvestment of dividends and interest payments from the SNB's holdings. It remained at a similar level to the end of 2018.
An SNB spokeswoman declined to comment on the current exchange rate of the franc or actions by the bank to tame the currency, which it has described as "highly valued" and whose strength hurts Swiss exporters.
Economists think the reserve assets data showed the SNB had been absent so far this year from the currency markets, holding its firepower in case it needs to counter any surge in the value of the franc.
"The small levels of interventions so far this year give the SNB scope to intervene if need be," said Maxime Botteron, an economist at Credit Suisse.
For the moment, interventions will be done sporadically and in smaller volume than between 2015 and 2017, he said, with the central bank waiting to see what the ECB does and how that affects the markets.
"The Swiss franc would have to get much stronger for the SNB to restart large interventions," Botteron said.
Earlier, data from the SNB showed the Swiss current account surplus increased to 17.22 billion francs ($17.55 billion) during the first quarter, up from 15.18 billion francs in the fourth quarter of 2018.