Tuesday saw the value of the Swiss franc gain against the common currency of the European Union and the U.S. dollar, propelled by a central bank official's commentary about likely changes, according to Dow Jones Newswires.
The franc probably will draw down prior to strengthening after the sovereign debt scourge is solved, Swiss National Bank Vice President Thomas Jordan said. Consequently, interest in safe-haven monetary units like the franc will slow as well.
"We've always said that it's a minimum exchange-rate and not an exchange-rate target versus the euro," Jordan said at a Tuesday conference today in Switzerland, according to Bloomberg. "At the moment, the franc remains highly valued, overvalued, and should depreciate again over time."
SNB officials intervened early this past September by establishing a ceiling against the single currency, which was an attempt to maintain Switzerland's export industry as the debt scourge exacted damage.
The SNB is prepared to continue acting if policy makers aim to prevent deflation threats, Jordan said while also citing how sensitive the franc is to the sovereign debt crisis.
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