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Swiss franc reaches 20-month high

Swiss franc strengthens on foreign exchange market as dollar slumps Keystone

The Swiss franc has reached fresh highs against the dollar as the currency's safe-haven status continued to attract investors' funds amid jittery world markets.

This content was published on September 20, 2001 - 08:38

The dollar started its slump as US stocks tumbled on Wall Street and key companies warned about weaker earnings.

"Stocks are definitely fuelling the move lower in the dollar," said Hugh Walsh, vice president of Fortis in New York.

"The dollar and the euro came off after the US stock market disappointed. Now we will see just how much these calls to 'stay the course' [after last week's attacks] are worth," one dealer said.

After testing the level several times on Wednesday, the dollar finally fell below the technical level of SFr1.5950 in late trading in Europe and touched a session low of SFr1.5859.

"I think it is just getting started. We are going to see stop-loss selling of shares and this money is going to flee into the franc," one trader said.

The US is widely believed to be preparing a military operation as part of its response to last week's terrorist attacks, which has prompted buying of the franc on fears about the political and economic consequences.

The euro, which has touched record lows against the franc this week, was little changed at SFr1.4780.

swissinfo with agencies

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