* SNB keeps prices unchanged, pushes Swiss franc higher
* Australian dollar jumps on bullish jobs data surprise
* Kiwi dollar rises right after RBNZ says price reduce may be last
By Anirban Nag
LONDON, Dec ten The Swiss franc rose against the euro on Thursday soon after Switzerland’s central bank kept interest rates on hold at record lows, defying some expectations that it may well act to weaken an overvalued currency.
The Swiss National Bank kept its target range for three-month Libor at between -1.25 and -.25 percent as expected, but it stated it would stay active in the currency market place if necessary.
The euro fell to 1.08 francs, its lowest in a week, from around 1.0830 francs ahead of the policy announcement.
Ahead of the European Central Bank met last week, most economists polled by Reuters had forecast the SNB would leave prices unchanged. But a third of them, wary that much more easing by the ECB would enhance the franc, anticipated the SNB to reduce rates.
The ECB loosened policy in measures that nevertheless fell properly short of marketplace expectations, pushing the euro broadly larger and taking pressure off the SNB to act and weaken the franc.
“The SNB had the chance to ease policy like the ECB and keep interest rate differentials and discourage inflows. But they chose not to. So we are seeing the euro weaken against the franc,” mentioned Chris Turner, head of currency method at ING.
“Over a period of time we anticipate the euro to ease to 1.05 francs, but there is a lot of difficult perform and you in no way know where the SNB will come and intervene.”
The SNB stressed its willingness to intervene to weaken what it calls a “substantially overvalued” franc.
Currency reserves have ballooned to almost 563 billion francs, a record higher. Credit Suisse economists in November estimated the SNB was purchasing foreign currency worth around 400-500 million Swiss francs ($ 900 million) per week.
The euro pulled back from a one particular-month high against the dollar to trade .five % reduced at $ 1.0975. The frequent currency scaled a 1-month peak of $ 1.1044 on Wednesday, extending last week’s short-covering rally right after the ECB fell short of delivering the aggressive easing many had anticipated.
Meanwhile, the Australian dollar reached a high of $ .7333 , pulling away from the earlier day’s two-week low of $ .7169. It last stood at $ .7295, up .9 percent, helped by a robust jobs report.
Yet another notable mover was the New Zealand currency, which rallied after the Reserve Bank of New Zealand cut interest rates but mentioned further easing ought to not be needed.
The kiwi dollar climbed to a higher of $ .6782, much more than two complete U.S. cents above the earlier day’s low of $ .6562. It was last up .three % at $ .6737.
“The kiwi need to not appreciate any further as the RBNZ will otherwise take action once more,” mentioned Antje Praefcke, currency strategist at Commerzbank. “I would not oppose the RBNZ there and in my view levels above $ .68 are clearly promoting levels.” (Editing by Hugh Lawson)
