Swiss lose battle in currency war that could spread
Paris (AFP) - Historically neutral Switzerland's foray into the global currency war ended in defeat this past week after its central bank left markets shell-shocked by abandoning the franc's exchange rate floor, analysts said.
But with major shifts in monetary policy under way, the currency war is hardly over and the front lines will move to other countries.
"The Swiss central bank was the first to throw itself into the currency war, (and) it is the first to capitulate," said Christopher Dembik, an economist at Saxo Bank.
The capitulation amounted to abandoning the Swiss franc's exchange rate floor of 1.20 francs to the euro, which the Swiss National Bank had imposed more than three years ago to stop the franc from appreciating too much against the European single currency.
But on Thursday the SNB raised the white flag and surrendered, letting the franc float.