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(Bloomberg) -- The Swiss franc surged to its strongest level on record against the euro as the Swiss National Bank removed its cap on the currency, concluding that it was no longer justified.

The currency strengthened at least 25 percent against all of its 16 major peers as the SNB removed the 1.20 per euro limit that had been in force since September 2011. Pressure on the cap increased in recent months as speculation the European Central Bank was preparing a program of bond buying, or quantitative easing, weakened the euro. The SNB also cut its interest rate to minus 0.75 percent.

“Clearly they are seeing a lot of inflows coming and deciding the cost is too high,” said Geoffrey Yu, a London- based senior currency strategist at UBS Group AG, Switzerland’s largest lender. “They think too much money is going to come in after QE so they need a plan B. It’s very surprising.”

The franc climbed 30 percent to 92 centimes per euro at 9:53 a.m. London time, according to data compiled by Bloomberg, after touching 85.17 centimes, the strongest level on record. It rose 26 percent to 81 centimes per dollar.

To contact the reporters on this story: David Goodman in London at dgoodman28@bloomberg.net; Lucy Meakin in London at lmeakin1@bloomberg.net To contact the editors responsible for this story: Paul Dobson at pdobson2@bloomberg.net

Bloomberg