The euro suffered its biggest one-day drop against the Swiss franc in history and skidded to an 11-year low against the U.S. dollar after the Swiss National Bank (SNB) suddenly ditched its commitment to keep its franc above 1.20 per euro. Investors took this as a sign that the European Central Bank would launch large-scale bond buying next week, as many had already expected. ECB policy makers meet on Jan. 22 to discuss introducing new stimulus, including quantitative easing, that may add to pressure on the franc against the euro. The Swiss currency surged as much as 30 percent to a high of 0.8500 franc per euro after the SNB’s announcement and gained against all of the more than 150 currencies tracked by Bloomberg. A gauge of global currency volatility jumped to the highest in more than a year. The European unit was last up 0.3 percent on the day at 0.9945 francs. Against the dollar, the euro was flat on the day at $1.1635 after falling as low as $1.15675 on Thursday, a level not seen since November 2003. The euro has declined 6.1 percent in the past month, the worst performer of 10 developed-nation currencies. The USD touched a fresh one-month low of 115.90 yen in early Asian trade, and was last steady on the day at 116.14 yen. The yen headed for its biggest weekly gain since the euro´s 1999 debut.
Brent crude futures were trading at $48.47 per barrel, up 20 cents since their last settlement. U.S. crude was trading at $46.55 a barrel, up 30 cents. Despite the slight price gains, oil opened up into a wobbly market after Switzerland’s unexpected move. The overall situation in oil markets remains dominated by oversupply, created by soaring U.S. shale output as well as high production from OPEC members, as well as Russia.
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