Switzerland has agreed with the US that it will not manipulate its currency, in a rare joint statement widely seen as a “green light” for further intervention by the country’s central bank to restrain a rise in the franc.
The Swiss National Bank and the US Treasury on Monday issued a declaration formally aligning their views on foreign exchange matters, with both countries promising not to “target exchange rates for competitive purposes”. The statement also recognised that market interventions are a valid tool for addressing currency volatility or “disorderly” moves in exchange rates.
“The US is recognising the SNB’s right to intervene. So it could be seen as a green light if they choose to do so again in future,” said Lee Hardman, currency strategist at MUFG.