Swiss Defy U.S. With Pledge to Keep Up Currency Intervention

(Bloomberg) -- The Swiss National Bank pledged to push ahead with interventions to rein in the franc, defying a U.S. decision to designate the nation a currency manipulator.

The central bank said it doesn’t engage in “any form” of currency manipulation, and its actions are aimed at helping it ensure price stability. A spokesman for the Swiss Finance Ministry made comments to the same effect.

Switzerland has been intervening on and off for more than a decade to keep the franc -- which tends to attract investors in times of market stress -- from strengthening too much.

The decision by the U.S. comes at the end of a particularly intense year in which the franc appreciated during the initial outbreak of the coronavirus pandemic, forcing the SNB to step up its market battle.

The franc briefly firmed against the dollar and the euro before reversing course. It weakened to 1.08026 per euro as of 3:15 p.m. Frankfurt time, compared with 1.07881 shortly before the Treasury Department statement.

The U.S. also labeled Vietnam a manipulator. It said it will follow up with both countries “to work toward eliminating practices that create unfair advantages for foreign competitors.”

SNB policy makers meet this week and are due to announce their interest-rate decision and quarterly assessment on Thursday morning. That statement is likely to repeat their view that the franc is “highly valued” and they will intervene as needed. The main policy interest rate will probably be left at -0.75%.

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